Threshold limit of under GST for insurance agent

This query is : Resolved

KETAN MEHTA (Querist)
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06 November 2025 The person has received insurance commission income during the year, and the total commission has exceeded the threshold limit of ₹20 lakh. Apart from this, the person also earns income from dividends and interest.

Kindly confirm whether GST registration is required in this case, considering that the insurance company already discharges GST under the reverse charge mechanism (RCM) on such commission income.

Further, if GST registration is not required as per provisions, and the person has already applied for registration, can a request be made for cancellation of the said registration?

Kindly advise.

Regards,

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 November 2025 Under Notification No. 13/2017 – Central Tax (Rate) dated 28.06.2017, the services provided by an insurance agent to any insurance company are covered under Reverse Charge Mechanism (RCM).
As per Section 23(1)(a) of the CGST Act, 2017,

“Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act shall not be liable to registration.”

Since:

The only taxable supply made by the person (the insurance agent) is under RCM (on which the recipient pays GST),

The agent is exclusively making supplies where tax is payable by the recipient under RCM,

Therefore, GST registration is not required for such an insurance agent — even if the total commission exceeds ₹20 lakh.

This position has also been clarified by CBIC through FAQs and various circulars — that insurance agents and similar persons providing services under RCM are not required to register under GST, regardless of turnover.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 November 2025 - If the person has already applied for or obtained GST registration, but is not liable under Section 23(1), they can apply for cancellation.
- Procedure:
- File Form GST REG-16 on the GST portal.
- Mention reason as “Not liable to be registered under GST”.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 November 2025 Good luck...

KETAN MEHTA

KETAN MEHTA (Querist)
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10 November 2025 Registration applied but not yet confirmed - some queries raised by department. Can we mention there to reject the application to officer?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 November 2025 The application is with department, so only after acceptance or rejection of the application you can take further action.

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