Shares of insurance companies may trade higher on Thursday, August 21, after reports indicated that life and health insurance purchased by individuals could be exempted from the current 18 percent Goods and Services Tax (GST).
The GST Group of Ministers (GoM) on insurance has recommended that health and life insurance premiums be excluded from the levy to make insurance more affordable and boost penetration in India’s underinsured market.
The final decision will be taken by the GST Council following consultations with states, Bihar Deputy Chief Minister and GoM convener Samrat Choudhary said.
However, several states have raised concerns over possible revenue losses if insurance is exempted from GST.
The move comes in the backdrop of Prime Minister Narendra Modi’s Independence Day announcement on the rollout of GST 2.0 ahead of Diwali, which is expected to rationalise tax slabs into two broad categories of 5 percent and 18 percent, with a higher sin tax of 40 percent.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.
