Exclusive | Insurers to breathe easy as GST may be lifted from reinsurance after elections
The insurance sector is likely to see a breather from tax burden with the GST Council set to review an exemption for reinsurance after the elections, Moneycontrol has learnt.
In its attempt to not disrupt the insurance industry practices, the Goods and Services Tax (GST) Council may issue a clarification that reinsurance is not a supply of service, a senior government official said.
Many leading insurance companies had last year reportedly got notices for non-payment of GST on reinsurance premiums. By definition, 18 percent tax is levied on any supply of service.
“The GST’s fitment committee has already discussed the issue and it is proposed that reinsurance should not be treated as supply and hence no GST should be applicable on it. The fitment committee proposal is kept ready to be placed before the GST Council in the next meeting after the elections. The issue whether reinsurance is a supply will be placed in the next GST meeting. The new government is likely to be formed in early June. The GST Council meeting may happen in June-end,” the official told Moneycontrol.
