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Reduction in GST on health and life insurance could act as catalyst for business growth
- Demand for reduction in GST rate on health and life insurance is gaining strength in both political and industry circles. Currently, all health and life insurance policies attract 18% GST. However, prior to implementation of GST, insurance premium attracted service tax at 15%.
- While decision of GST council is to be seen for any reduction in taxes levied on insurance premium, however, given government’s focus on improving insurance penetration and support across cohorts of stakeholders, probability of a decline in GST remains high.
- Any reduction in GST on premium, if announced, will provide breather to the consumers through lower premium rates. For the industry, it remains beneficial as passing on the benefit of reduction in GST rates is expected to bolster customer accretion and/ or sum assured and thus aid business growth.
- While lower taxation will benefit all players, in listed space, Star Health remains relatively better beneficiaries as it is a standalone insurer primarily engaged in individual health insurance business.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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