Union Minister for Road Transport and Highways, Nitin Gadkari, has formally requested Finance Minister Nirmala Sitharaman to eliminate the 18 percent Goods and Services Tax (GST) on life and medical insurance premiums. In a letter dated July 28, Gadkari argued that the tax imposes an undue burden on senior citizens and hampers the growth of the insurance sector.
Gadkari’s appeal highlights the impact of taxing insurance premiums, which he believes unfairly penalizes those seeking financial protection for their families. The minister’s call for tax relief follows a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union, which has pointed out the challenges faced by the industry due to this tax.
Following Gadkari’s announcement, shares in the insurance sector have experienced a notable uptick –
HDFC Life Insurance Company saw its stock rise by 1.39 percent, reaching ₹707. SBI Life Insurance Company’s shares increased by 1.24 percent to ₹1,742.45. ICICI Lombard General Insurance also saw a boost, with its shares climbing 1.16 percent to ₹1,990.30.
Life Insurance Corporation (LIC) is currently trading at ₹1,182.45, recovering from a day’s low of ₹1,170. Star Health and Allied Insurance Company’s stock is trading at ₹612.
The GST Council, which decides on tax issues, is expected to address this matter in their upcoming meeting in August. The last council meeting was held on June 22.
