SBI Life, HDFC Life shares erase gains despite 5% GST buzz; Emkay decodes

The confusion whether the likely 5 per cent GST rate on insurance premiums will make the policies cheaper or not has worried investors

GST cut on insurance: Insurance stocks, which saw a leg-up in the initial trading hours on Monday, ended off highs amid goods and services tax (GST) reform-led confusion.

 

As per the proposed reform, the current four-rate structure of the GST system will be converted into two-rate structure. Thus, goods and services will be taxed at either 5 per cent or 18 per cent rather than 5 per cent, 12 per cent, 18 per cent, and 28 per cent rates.

 

For insurance companies, which levy a GST of 18 per cent at present, a lower rate of 5 per