SBI Life Insurance, HDFC Life Insurance, LIC, ICICI Lombard, other insurance stocks rallied on Thursday after reports indicated that the GST Council’s Group of Ministers (GoM) has recommended exempting life and health insurance premiums purchased by individuals from Goods and Services Tax (GST).
Currently, a GST rate of 18% is levied on life and health insurance premiums. According to media reports, the GoM on insurance has proposed that these premiums be exempted from the levy. The final decision, however, will rest with the GST Council after wider consultations with states.
On the stock exchanges, SBI Life Insurance gained 1.7%, HDFC Life Insurance rose 1.31%, ICICI Lombard General Insurance advanced 1.28%, and ICICI Prudential Life Insurance climbed 1.53%. State-owned LIC gained 1.91%, while General Insurance Corporation of India added 2.75%.
Among other players, Star Health and Allied Insurance surged 3.02%, Go Digit General Insurance advanced 2.03%, and Niva Bupa Health Insurance rallied 4.46%.
The proposal to reduce GST rates comes as part of the broader GST 2.0 reforms announced by Prime Minister Modi in his Independence Day speech. Reports say that GST may be rationalised into two major slabs: 5% and 18%, with a sin tax rate of 40%.
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