SBI Life share up by 0.95% after proposal to exempt health & life insurance premiums from GST

Shares of health & life insurance companies are seeing price movement today. This after GST Group of Ministers proposed that health and life insurance premiums paid by individuals should be fully exempt from GST. At 12:40 p.m. IST 21^st August, SBI life insurance share is up by 0.95%, trading at Rs 1,876.10. LIC share price is up by 0.16%, at Rs 900.80. HDFC Life Insurance is down by 0.18% trading at Rs 795.15. ICICI Prudential share  is down by 0.25% at Rs 630.45. Shares of these companies started the day today up with a jump. Then profit booking started. Nifty 50 index is up by 0.29% at this time.

This comes after the Goods and Services Tax (GST) Council’s group of ministers (GoM) announced GST exemption for health and life insurance premiums for individuals. This means that there would be no GST on insurance premiums for individuals paid for health and life insurance policies. At present, 18% GST is levied on health and life insurance premiums, which has now been proposed to be abolished.

Bihar deputy chief minister and convenor of the panel of ministers on health and insurance Samrat Choudhary said – “This has been discussed and the GoM report will be presented to the council”. Furthermore, Telangana deputy CM Mallu Bhatti Vikaramarka, who is a member of the GoM commented that it is clear that the benefits of the GST must go to policyholders and not the companies.

A 13-member panel was set up in September last year on health and insurance to create a roadmap on the GST issue. The panel is likely to submit their report by October this year.

The proposal, if approved, could make health and life insurance policies more affordable to individuals. It may also result in wider adoption of insurance policies in India. However, one concern remains that after the GST waiver, Input Tax Credits (ITC) could also be removed. In the absence of ITC, the overall expenses of insurance companies will rise, which they may ultimately pass on to the customers.

The 18% GST waiver is a good sign for individuals but insurance companies will be keen to see if the ITC is removed, or the government decides otherwise. For now, the investor sentiment is positive and the shares of healthcare companies are rising.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source : NSE