Reinsurance points in India set to be mentioned in council assembly

The Items and Companies Tax (GST) Council of India is predicted to deliberate on GST implications for co-insurance and reinsurance in its forthcoming assembly.

The dialogue follows a advice from the fitment committee, as indicated by a senior authorities official in a report from Moneycontrol. The transfer seeks to handle sure trade practices which have led to GST non-compliance, necessitating clearer tips.

GST authorities have just lately concluded probes into a number of insurance coverage companies, uncovering tax evasion incidents throughout three distinct eventualities: extreme commissions to brokers, and points associated to co-insurance and reinsurance preparations. These findings have prompted the issuance of formal notices to the implicated insurance coverage entities.

The official indicated that these insurance-related considerations, now widespread inside the trade, shall be reviewed by the GST Council following an examination by the fitment committee. The council’s agenda will embody addressing stakeholder representations which were submitted to GST authorities. It’s anticipated to happen earlier than the top of March.

GST notices for insurers

Notably, the Life Insurance coverage Company of India (LIC) was served with a GST discover for Rs 806.3 crore for the fiscal 12 months 2017-18, citing numerous compliance lapses, together with the inaccurate reversal of enter tax credit linked to reinsurance actions.

Moreover, in 2023, Star Well being and Allied Insurance coverage confronted a GST demand of Rs 38.99 crore for alleged non-compliance associated to premiums collected beneath co-insurance preparations from July 2017 to March 2023.

ICICI Lombard Common Insurance coverage additionally obtained a discover for about Rs 1,730 crore in unpaid GST spanning from July 2017 to March 2022. The costs concerned non-payment of GST on co-insurance premiums obtained and on reinsurance premiums ceded to each Indian and international reinsurance firms through the specified interval.

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