ICICI Prudential and HDFC Life shares are in focus today as the insurance sector is raising concerns over the government’s proposed Goods and Services Tax (GST) reduction on life and health insurance. Industry leaders have warned that cutting GST to 5% or even nil could backfire if input tax credit (ITC) is not allowed.
According to sources cited by CNBC-TV18, insurers fear that the move could increase operational costs, which may eventually push up premiums and reduce consumer demand. Current GST regulations do not provide ITC benefits on insurance products, amplifying the industry’s concerns.
Officials say the government is actively considering lowering GST rates on health and life insurance from 18% to 5% or zero. However, experts suggest the insurance sector may urge the Finance Ministry to rethink the move, emphasising that a GST cut without ITC could create more challenges than relief.
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