Shares of General Insurance Corporation of India (GICRE) fell sharply by nearly 5% on December 23, trading at ₹477.15, after the GST Council postponed its decision on reducing or exempting Goods and Services Tax (GST) on insurance premiums.
During its meeting on December 21, the council decided to defer discussions to allow more time to reach a consensus.
Key Highlights:
- Recommendations by GoM: The Group of Ministers (GoM) had proposed exempting GST on health insurance for senior citizens and term life insurance. Additionally, a reduced GST rate of 5% for health insurance with a coverage of ₹5 lakh was suggested.
- Current Taxation: Insurance premiums for life and health policies are currently subject to an 18% GST rate.
This delay in granting potential tax relief dampened investor sentiment, leading to a sell-off in insurance stocks, including GICRE. Investors are expected to keep a close watch on further developments regarding GST reforms for the insurance sector.
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