ITC FOR GENERAL INSURANCE SERVICE SUPPLIER

The Difference is the Insurance company is engaged in the business of Insurance ,they are further supplying insurance services , whereas the business man who is availing such services is a ultimate customer & not supplying it further.

HOW IS IT A FURTHER SUPPLY? If an Insurance company is having a motor vehicle and takes Insurance for it. HOW IS IT FOR A FURTHER SUPPLY ?Is that,in the above mentioned case ITC is not available but when , an insurance company insures a motor vehicle ( of customer) with other insurance company .And the other insurance company takes amount from 1st insurance company. Which money is given to it by the customer.

You’ve raised a valid point, but the key difference lies in the "further supply of services" clause under GST law. As per Section 17(5)(b)(iii) of the CGST Act, ITC on motor vehicle insurance is restricted unless the recipient is in the business of providing the same category of service (i.e., general insurance services).

For a general insurance company, insuring motor vehicles is part of their core business activity hence, they are eligible to claim ITC as the input service is used for the furtherance of their supply of insurance services.

However, if any other GST-registered business avails motor vehicle insurance, it is considered as used for personal or business conveyance (which is blocked credit under Section 17(5)), unless it falls under specific allowed categories like transportation of goods, passengers, etc.

The intent is to prevent credit misuse where the insurance service is not linked to further taxable supplies.

You can refer to various GST Advance Rulings on ITC for insurance companies for practical clarity on this.