Goods and Services Tax: Rs. 20,000 crore DGGI notices to insurance sector put to rest
In what could end the long battle between the GST authorities and the insurance companies and extending a major relief to the companies, the recently notified clarifications approved by the 53rd GST Council meeting has put Rs. 20,000 crore worth notices to a legal end, sources told CNBC-TV18.
"Over 100 notices which were sent by the Directorate General of GST intelligence (DGGI) to all the insurance companies operating in the country, will now be null and void as the GST council has taken note of their representations and clarified in the favour of the industry with respect to co-insurance, re-insurance, wreck and salvage etc," sources added.
The insurance sector had been facing DGGI notices since November 2022. The sector was embroiled with GST demands for non-payment of Goods and Services Tax (GST), particularly on account of co-insurance agreements, reinsurance commissions, and the reinsurance of crop schemes, etc.
There was a lack of clarity in the GST law, and DGGI had sent notices claiming unpaid taxes leading to a substantial financial burdens on insurance companies, with demands amounting to over Rs. 20,000 crores.
