Road and Transport Minister Nitin Gadkari has written to Finance Minister Nirmala Sitharaman, seeking immediate withdrawal of the 18% GST imposed on life insurance and health insurance premiums in this year’s budget. Gadkari’s plea comes after the Nagpur Divisional Life Insurance Corporation Employees Union submitted a demand letter to him, which he has taken seriously and brought to the Finance Minister’s attention.

The Minister argued that taxing health insurance premiums is equivalent to levying a tax on life uncertainty, as people invest in insurance to secure their family’s future. Excessive taxation may deter individuals from purchasing insurance, dealing a blow to the insurance sector. Gadkari emphasized that insurance has become a necessity for securing one’s future, and high GST rates are making premiums unaffordable, particularly for senior citizens. This is not the first time the issue has been raised. The Conference of General Insurance Agents Association of India had previously demanded a reduction in GST on medical insurance policies from 18% to 5% last June.
Data shows that GST rates on health insurance have almost doubled in the last five years, leading to decreased interest in health insurance policies and lower renewal rates. Gadkari urged the Finance Minister to consider this aspect and reduce GST rates to encourage people to invest in insurance policies.