Finance Minister Nirmala Sitharaman Dismisses Objections to Tax on Insurance Premium

The government has defended its decision to impose GST on insurance premiums despite growing dissent, stating that it was a decision of the GST Council. Finance Minister Nirmala Sitharaman clarified that there has been a tax on medical insurance even before the introduction of GST. She emphasized that it is not a new tax, as there was already a Service Tax on medical insurance in all states.

Sitharaman criticized the Opposition for protesting against the tax without discussing its removal in their respective states or raising the issue in the GST Council. Cabinet colleague Nitin Gadkari expressed reservations about the GST on insurance premiums in a letter to Sitharaman, stating that it hinders the growth of a socially necessary business segment. His concerns were echoed by Congress’s Rahul Gandhi, who criticized the BJP for seeking a “tax opportunity” in every disaster and alleged insensitivity towards the public.

The announcement of the GST on premiums in this year’s budget has faced criticism from various quarters. Opposition parties have accused the government of favoring states ruled by its allies, while many in the middle class have highlighted the high tax burden. The Finance Minister dismissed these allegations, stating that all states have been provided funds, whether mentioned in the Budget speech or not.