Quick Summary
In a significant move ahead of the Union Budget, the general insurance sector has received a substantial relief amounting to over Rs 18,000 crore. The GST Council has decided to drop the hefty tax demand that had been imposed on insurers, providing much-needed respite to the industry. The General Insurance Council (GI Council), the apex body of general insurance companies in India, announced the relief measures. These include the cancellation of GST demands on co-insurance and reinsurance com
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FAQ :
The general insurance sector has received relief amounting to over Rs 18,000 crore.
The GST Council has dropped demands related to GST on co-insurance and reinsurance commissions, and on reinsurance for crop insurance schemes.
In co-insurance, multiple insurers share the risk of an insured person or entity. Typically, one insurer collects the premium, pays the GST, and then distributes the premium to the other co-insurers.
The General Insurance Council argued that these transactions should be considered 'no supply' under GST law, leading to the cancellation of past GST cases.
By dropping GST demands on reinsurance for crop insurance schemes, the decision ensures that the intended benefits of these schemes reach farmers without the added burden of tax demands.
The general insurance industry is urging the government to reduce the GST on individual health insurance policies from 18% to 5%.
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