The Central Board of Indirect Taxes & Customs (CBIC) through the Circular No. 244/01/2025-GST, regularised the GST payment on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding/ re-insurance commission deducted from the reinsurance premium filed via the insurer to the reinsurer.
The circular was furnished via the granted authority by section 168(1) of the Central Goods and Services Tax Act, 2017 and the recommendations given via the GST Council at its 53rd meeting, which was carried out in New Delhi dated June 22, 2024.
Certain activities and transactions were added to Schedule III of the CGST Act, 2017 as activities or transactions that will not be deemed as a supply of goods or services, based on the suggestions of the 53rd meeting of the GST Council, which was carried in New Delhi dated June 22, 2024.
Apportionment activity of co-insurance premium via the lead insurer to the co-insurer for the insurance services jointly furnished via the lead insurer and the co-insurer to the insured in co-insurance agreements within the norms that the lead insurer files the Central tax, the State tax, the Union territory tax along with the integrated tax on the whole amount of the premium filed via the insured are not regarded as a supply nor as a supply of services.
The services via the insurer to the reinsurer for which ceding commission or the reinsurance commission is deducted from the reinsurance premium filed via the insurer to the reinsurer within the norms that the Central tax, the State tax, the Union territory tax, and the integrated tax are filed via the reinsurer on the gross reinsurance premium liable to get paid via the insurer to the reinsurer, inclusive of the stated ceding commission or the reinsurance commission.
The aforesaid provisions were legislated vide Finance (No. 2) Act, 2024, and have come into force dated 01.11.2024 vide GST notification No. 17/2024-Central Tax dated 27.09.2024.
GST council in its 53rd meeting suggested that the GST payment on the activities or transactions as mentioned in paragraph 2 aforesaid may be regularized for the earlier duration i.e from 01.07.2017 to the effective date of amendments in the CGST Act, on ‘as is where is’ basis.
Under the suggestions of the 53rd GST Council, the GST payment on the activities or transactions cited in paragraph 2 aforesaid is regularised for the duration 01.07.2017 to 31.10.2024, on an ‘as is where is’ basis.
