GST Council defers decision on GST cut on insurance premium; SBI Life Insurance falls over 3%

Insurance stocks in Tuesday's session (September 10) traded largely weak after the GST Council deferred the decision to reduce or waive GST on health Insurance. At the last count, shares of SBI Life were down over 3 per cent at Rs 1,843, while HDFC Life was down 2.6 per cent at Rs 716.45, ICICI Prudential traded weak by 1.77 per cent at Rs 744.8 and LIC traded firm with gains of 0.55 per cent at Rs 1,034.65 per share.

The drag largely comes as expectations remained that GST Council in its meeting this time would consider rebate on GST for premiums paid on health insurance. But the decision has been postponed to the next meeting in November. 

However, little progress has been made in the direction as the Council has decided to form Group of Ministers (GoM) to look into the issues pertaining to GST on the life insurance and health insurance.

The Fitment Committee that comprises the Centre and state tax officials, on Monday presented a report giving data and analysis and implications of GST reduction on life, health and reinsurance premiums.

Of all the insurers, LIC stock has run-up the most in the last one year by 54 per cent.

SBI Life stock has been upgraded by InCred to an 'add' call from the previous 'hold' rating with a raised target of Rs 2,150 from the earlier Rs 1,750 per share target price.