No ITC benefit towards GST paid on commission on individual health, life policies from Sept 22

The CBIC has issued a set of FAQs clarifying on the taxation of various goods and services when the new GST slabs kick in from September 22

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Insurance companies will not be able to claim input tax credit on GST paid on inputs like commissions and brokerages for individual health and life insurance policies with effect from September 22, the CBIC said on Tuesday.

The Central Board of Indirect Taxes and Customs (CBIC) has issued a set of FAQs clarifying on the taxation of various goods and services when the new GST slabs kick in from September 22.

The GST Council in its meeting on September 3 had decided to exempt premium paid on individual health and life insurance policies from GST effective September 22, from the current 18 per cent rate.

‘To a question which input services of insurers are exempt from GST, the CBIC said at present, insurers are availing ITC on many inputs and input services such as commissions, brokerage and reinsurance, etc.

“Out of these input services, reinsurance services will be exempted. Input Tax Credit of other inputs or input services is to be reversed because the output services will be exempted? the CBIC said.