Union Minister Nitin Gadkari has expressed discomfort over the Finance Minister's decision to impose a GST on life and medical insurance premiums, citing it as a burden and deterrent for growth. This statement comes in the wake of criticism by opposition parties who have labeled the Union Budget 2024 as biased towards BJP's allies in Andhra Pradesh and Bihar. The BJP leader has urged for the withdrawal of this tax on priority and hopes for a consideration of his suggestion.
Union Minister Nitin Gadkari Expresses Discomfort over GST on Insurance Premiums
Background
On February 1, 2023, Union Finance Minister Nirmala Sitharaman presented the Union Budget 2024, which included a proposal to impose a Goods and Services Tax (GST) of 5% on life and medical insurance premiums. This proposal has drawn criticism from various quarters, including the opposition parties and Union Minister Nitin Gadkari.
Nitin Gadkari's Discomfort
Union Minister Nitin Gadkari, who holds the portfolios of Road Transport and Highways and Shipping, has expressed discomfort with the proposed GST on insurance premiums. He has cited concerns that it will burden the middle and low-income groups and discourage people from taking adequate insurance coverage.
Gadkari has urged the government to reconsider this decision and withdraw the proposed tax. He believes that it is crucial to promote insurance penetration in India, especially in rural and underserved areas.
Opposition Parties' Criticism
Opposition parties have also criticized the Union Budget for its perceived bias towards BJP's allies in Andhra Pradesh and Bihar. They have accused the government of ignoring the needs of other states and favoring those where BJP has strong political interests.
Gadkari's Suggestion
Gadkari has suggested that the government hold consultations with the insurance sector and other stakeholders before making a final decision on the GST on insurance premiums. He has also expressed hope that his concerns will be considered by the government.
Top 5 FAQs
1. Why is the GST on insurance premiums being proposed?
The GST on insurance premiums is proposed as part of the government's efforts to broaden the tax base and increase revenue.
2. How much GST will be imposed on insurance premiums?
The proposed GST rate on insurance premiums is 5%.
3. Who will be affected by the GST on insurance premiums?
The GST on insurance premiums will affect all individuals and businesses who take out insurance policies, including life insurance, health insurance, and general insurance.
4. What is the impact of the GST on insurance premiums?
The GST on insurance premiums will increase the cost of insurance policies, which could discourage people from taking out adequate insurance coverage.
5. What is the government's response to the concerns raised by Nitin Gadkari?
The government has not yet issued an official response to Nitin Gadkari's concerns, but it is likely to consider his suggestions and engage in consultations with the insurance sector before making a final decision.
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