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GST credit in insurance premium


vikram chouhan   15 August 2020

vikram chouhan

 3 likes  72 points

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Suppose I have taken Stock insurance policy and have paid insurance premium of 15000 inclusive of GST for the period b/w 31/01/2020 to 30/01/2021.
whether prepaid should be calculated on Basic amount( exclusive of GST)
or total premium amount.

can prepaid for GST can be booked,
if yes then accounting treatment???

avater

Sagar Patel (Tax and Business Consultant)     16 August 2020

Sagar Patel
Tax and Business Consultant 
 805 likes  8819 points

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ITC on inward supply is available subject to section 16 except supply is blocked u/s 17(5).
As ITC credit on stock insurance is not considered as blocked u/s 17(5), you can claim ITC for same.

GST paid on insurance is not your expenses, because ITC is available for same.
So, only basic amount (excluding GST) is your expenses, so you have to calculate prepaid expenses on basis of basic amount only.

avater

vikram chouhan   16 August 2020

vikram chouhan

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What if it is the case of vehicle insurance

avater

Sagar Patel (Tax and Business Consultant)     16 August 2020

Sagar Patel
Tax and Business Consultant 
 805 likes  8819 points

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FOR vehicles, if Goods carriage Vehicle that you can take ITC on insurance for that.


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