Shares of New India Assurance Company Limited (NIACL) fell by over 6% on December 23, trading at ₹201.26, following the GST Council’s decision to defer discussions on granting tax relief for health and life insurance premiums.
During its December 21 meeting, the GST Council postponed a decision to exempt and reduce the Goods and Services Tax (GST) on insurance premiums, citing the need for additional time to build consensus.
Key Developments:
- Recommendations by GoM: The Group of Ministers (GoM) had proposed exempting GST on health insurance for senior citizens and term life insurance. They also suggested reducing the GST rate to 5% for health insurance coverage up to ₹5 lakh.
- Current Taxation: Premiums on life and medical insurance currently attract an 18% GST rate.
This decision impacted the sentiment around insurance stocks, leading to a significant drop in NIACL’s share price. Investors are likely to remain cautious until further clarity emerges regarding the GST Council’s stance on the proposed tax relief measures.
