𝗖𝗕𝗜𝗖 𝗖𝗹𝗮𝗿𝗶𝗳𝗶𝗲𝘀 𝗚𝗦𝗧 𝗧𝗿𝗲𝗮𝘁𝗺𝗲𝗻𝘁 𝗼𝗻 𝗖𝗼-𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗥𝗲𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀 The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 244/01/2025-GST, providing clarity on the GST applicability for co-insurance premium apportionment and reinsurance commission deductions, based on recommendations from the 53rd GST Council meeting. [img:GW5wBCvwG]

𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗖𝗶𝗿𝗰𝘂𝗹𝗮𝗿 𝗡𝗼 𝗚𝗦𝗧 𝗼𝗻 𝗖𝗼-𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗔𝗽𝗽𝗼𝗿𝘁𝗶𝗼𝗻𝗺𝗲𝗻𝘁: The premium amount apportioned by the lead insurer to the co-insurer in co-insurance agreements will not be treated as a supply, provided the lead insurer pays GST on the full premium received from the insured. 𝗡𝗼 𝗚𝗦𝗧 𝗼𝗻 𝗖𝗲𝗱𝗶𝗻𝗴/𝗥𝗲𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗖𝗼𝗺𝗺𝗶𝘀𝘀𝗶𝗼𝗻: The ceding commission or reinsurance commission deducted from the reinsurance premium will not be considered a supply, as long as the reinsurer pays GST on the total reinsurance premium, including the commission amount.

𝗔𝗺𝗲𝗻𝗱𝗺𝗲𝗻𝘁 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗳𝗿𝗼𝗺 𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿 𝟭, 𝟮𝟬𝟮𝟰: These provisions were enacted under the Finance (No. 2) Act, 2024 and became effective via Notification No. 17/2024-Central Tax dated September 27, 2024. 𝗥𝗲𝗴𝘂𝗹𝗮𝗿𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗣𝗮𝘀𝘁 𝗚𝗦𝗧 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀: The payment of GST on these transactions from July 1, 2017, to October 31, 2024, has been regularized on an "as is where is" basis, ensuring compliance for past periods.

𝗪𝗵𝗮𝘁 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗦𝗵𝗼𝘂𝗹𝗱 𝗗𝗼 ✔ Insurance and reinsurance companies must review their tax compliance based on these clarifications. ✔ Ensure GST is correctly accounted for in co-insurance and reinsurance transactions moving forward. ✔ Consider revisiting past GST payments to align with the regularization guidelines. #GST #CBIC #Insurance #Reinsurance #TaxCompliance #Finance