West Bengal CM slams GST on insurance premiums, urges Centre to reconsider

The decision to impose an 18% tax on insurance policies and premiums has drawn criticism from several Opposition leaders, including Mamata Banerjee

West Bengal Chief Minister Mamata Banerjee has called on the Bharatiya Janata Party (BJP)-led central government to roll back the Goods and Services Tax (GST) imposed on life and medical insurance premiums, arguing that the tax places an undue burden on people striving to secure their essential needs. The Trinamool Congress leader joins a growing chorus of voices opposing the move, which was announced by Finance Minister Nirmala Sitharaman in the Union Budget 2024-25.

In a strongly worded letter to the Finance Minister, Banerjee described the policy as "highly anti-people," urging the Centre to reassess its decision.

"The primary objective of life and health insurance is to provide financial security during unexpected times. These policies play a crucial role in ensuring that individuals and their families are able to cope with hardships during such challenging times. However, the imposition of GST on insurance premium increases the financial burden on the common man," Banerjee was quoted as saying by NDTV.

She further expressed concern that this additional cost could deter many from purchasing new policies or maintaining their existing coverage, thereby leaving them exposed to potential financial hardships.

The GST Council, which holds the authority to make decisions on tax-related matters, is scheduled to convene in August, with its most recent meeting having occurred on June 22.

The decision to impose an 18 per cent tax on insurance policies has been met with widespread criticism, not only from opposition leaders but also from within the ruling party. Union Minister Nitin Gadkari has echoed the demand for the tax to be withdrawn.

Opposition slams Budget: Claims of bias

These developments come amid a wave of criticism directed at the third Narendra Modi government's first Budget, presented last week. The Opposition has accused the Centre of favouring states governed by its key allies, the Telugu Desam Party (TDP) and the Janata Dal (United) (JDU), while many on social media have highlighted the high tax rates affecting the salaried class.

In response, Finance Minister Sitharaman dismissed these allegations, asserting that the Centre has allocated funds to all states. She clarified that the absence of a state’s name in the Budget speech does not indicate exclusion. The Bharatiya Janata Party (BJP) has defended the Budget, emphasising its long-term vision of achieving the goal of a ‘Viksit Bharat’ -- a developed India -- by 2047.