Insurance Stocks Rally on GST Exemption for Health, Life Insurance Products
Life insurance companies exhibited mixed performance.
Mumbai: Insurance sector stocks gained on Thursday after the centre proposed to exempt the Goods and Services Tax (GST) on life and health insurance premiums from the current rate of 18 per cent. The move will make insurance products more affordable to the masses and expand coverage. Small-cap insurers led the rally. Share price of pure health insurance company Niva Bupa rallied as much as 4.46 per cent to hit the day’s high at Rs 88.37 apiece on the BSE. Go Digit General Insurance and Star Health both gained 3 per cent each to Rs 375 and Rs 449.20 apiece respectively. General Insurance Corporation gained 2.75 per cent to touch a high of Rs 398. However, as the session progressed, around mid-session, it slipped into the negative territory. ICICI Lombard General Insurance share price rallied up to 1.43 per cent during the day to Rs 1998.
Life insurance companies exhibited mixed performance. Life Insurance Corporation of India (LIC) gained nearly 2 per cent to trade at Rs 917 apiece but closed down 0.43 per cent to Rs 895.50 apiece. SBI Life
Insurance gained as much as 1.83 per cent, HDFC Life Insurance and ICICI Prudential Life Insurance traded marginally in red after gaining initially in the morning session.
The Group of Ministers (GoM) has reportedly given its consent for the GST rate rationalisation. All the ministers of the participating states at the GoM meeting held on Thursday have accepted the Centre’s proposal to eliminate the 12 per cent and 28 per cent tax slabs and introduce the two-slab structure of 5 per cent and 18 per cent GST. While the participating states were in favour of GST elimination on health and life insurance products, they demanded that insurers pass on the benefit to policyholders and to minimize revenue losses. The GoM's recommendations will now be presented to the GST Council at its next meeting, expected in September.