No claim bonus in insurance policies may not attract GST
The Goods and Services Tax (GST) Council in its upcoming meeting is likely to give a breather on no claim bonus under insurance policies, sources privy to the developments told CNBC-TV18. The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, is likely to clarify that GST cannot be levied on no claim bonus, according to multiple people familiar with the development.
According to the GST Council nominated law committee, “GST is leviable only on actual insurance premium amount, after deduction of no claim bonus, payable by the policyholders to the insurer in respect of insurance services received from the insurer.”
Sources in the know told CNBC-TV18 that no claim bonus has to be treated as a permissible deduction.
The 48th GST Council, chaired by Nirmala Sitharaman, will be held on December 17, 2022, via video conferencing after a gap of nearly six months. The GST Council is headed by the Union finance minister and comprises representatives of all states and Union Territories (UTs).
The 48th GST Council meeting holds significance as it is the last before the Union Budget which will be tabled in Parliament on February 1, 2023. It is expected that the panel may also discuss two reports regarding GST levy on casinos, online gaming and horse racing, and the other on the setting up of an appellate tribunal, apart from tax rate changes on various items.
In the previous 47th GST Council meeting, conducted on June 28 and 29 in Chandigarh, the GST Council had decided to accept the group of ministers’ interim reports on the correction of duty inversion and exemption. Pre-packaged and pre-labelled retail packs, including curd, lassi and buttermilk, were also brought under GST.
