Gadkari's letter demanding GST cut not authorised: Sitharaman claims

New Delhi: After Union Transport Minister Nitin Gadkari wrote the Union Finance Ministry, demanding the removal of 18 per cent GST on health and life insurance premiums, Union Finance Minister Nirmala Sitharaman claimed that the letter was released without permission, The Tribune reported.

Sitharaman claimed that some minister wrote a letter, and some from their delegation made it public without permission, while the opposition saw this as an opportunity.

It was last month that the Centre released the budget, which caught in instant controversy, gathering criticism from many quarters. Then, the transport minister had written Sitharaman a letter of request demanding the withdrawal of GST on medical and life insurance. NDTV reported that Gadkari wrote the letter after he received a memorandum from the Nagpur Divisional Life Insurance Corporation Employees Union.

Gadkari said in the letter that, at present, both life and medical insurance premiums attract a GST rate of 18 per cent, and levying GST on life insurance premiums amounts to levying tax on the uncertainties of life.

Gadkari's letter read, "The Union feels that the person who covers the risk of life's uncertainties to give some protection to the family should not be levied tax on the premium to purchase cover against this risk. Similarly, the 18% GST on medical insurance premiums is proving to be a deterrent to the growth of this segment of business, which is socially necessary. Therefore, they have urged the withdrawal of GST, as mentioned above.

On Thursday, Sitharaman claimed that the matter was in the realm of the GST council and let the council take a call on medical insurance.