The Ministry of Finance has issued the circular regarding the regularizing payment of GST on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding/re-insurance commission deducted from the reinsurance premium paid by the insurer to the reinsurer.
Based on the recommendations of the GST Council in its 53rd meeting held on 22nd June, 2024, at New Delhi, and in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, the clarification is being issued through the Circular.
List Of Activities On Which No GST Is Payable
These activities or transactions were included in Schedule III of the CGST Act, 2017 as activities or transactions which shall be treated neither as a supply of goods nor as a supply of services:
Firstly, activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured in co-insurance agreements, subject to the condition that the lead insurer pays the Central tax, the State tax, the Union territory tax and the integrated tax on the entire amount of premium paid by the insured.
Secondly, Services by insurer to the reinsurer for which ceding commission or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer, subject to the condition that the Central tax, the State tax, the Union territory tax and the integrated tax is paid by the reinsurer on the gross reinsurance premium payable by the insurer to the reinsurer, inclusive of the said ceding commission or the reinsurance commission.
In its 53rd meeting, the GST Council recommended that the payment of GST on the activities or transactions, may be regularized for the past period, i.e. from 01.07.2017 to the effective date of amendments in the CGST Act, , on ‘as is where is’ basis.
Thus, as recommended by the 53rd GST Council, the payment of GST on the activities or transactions specified in paragraph 2 above is regularized for the period 01.07.2017 to 31.10.2024, on ‘as is where is’ basis.
Circular Details
Circular No. 244/01/2025-GST
Date: 28/01/2025
