These stocks are in focus as GST panel exempts life and health premiums: Check list

Insurance companies are set to be in sharp focus after India’s tax panel decided to exempt life and health insurance from Goods and Services Tax (GST). The move, confirmed by a panel member, is a major relief for both insurers and policyholders and is expected to significantly lower the overall cost of protection products.

This exemption directly benefits leading insurers such as HDFC Life, SBI Life, LIC, ICICI Prudential Life, ICICI Lombard, Niva Bupa, Star Health, GIC Re, and New India Assurance (NIACL). Analysts believe the decision could drive stronger demand for life cover and health policies, expanding insurance penetration in the country.

Other key GST Council meeting outcomes

The GST Council concluded its much-anticipated meeting late Wednesday, announcing a sweeping rationalisation of tax slabs under the government’s proposed GST 2.0 reform:

• Two-rate structure: The existing 5%, 12%, 18%, and 28% brackets have been replaced with a simplified 5% and 18% structure, effective September 22.

• 40% GST on sin and luxury goods: Items such as tobacco, pan masala, luxury cars, online gaming, and aerated drinks will attract a new 40% GST rate. This is expected to fetch around ₹45,000 crore annually.

• Revenue implications: The Centre estimated the rationalisation will lead to a total revenue loss of about ₹99,000 crore, though higher taxation on sin goods will partially offset this.

• States’ concerns: West Bengal’s finance minister pegged the likely revenue loss from the rejig at ₹47,700 crore. Several states have sought greater share in supplementary duties to protect revenues.

Market reaction

The GST relief for insurance comes at a time when insurers have faced pressure from high premium costs dampening growth. With GST exemption in place, market participants expect positive momentum in insurance stocks when trading resumes.

Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.

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