Quick Summary
The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 244/01/2025-GST on January 28, 2025, clarifying the GST treatment on co-insurance and reinsurance transactions, based on the 53rd GST Council meeting held on June 22, 2024. Based on the recommendations of the GST Council in its 53rd meeting held on 22nd June, 2024, at New Delhi, and in exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017, the following clarification
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FAQ :
The circular clarifies the GST treatment on co-insurance and reinsurance transactions, based on recommendations from the 53rd GST Council meeting.
It covers the apportionment of co-insurance premium by the lead insurer to the co-insurer and services by an insurer to a reinsurer where ceding or reinsurance commission is deducted.
The lead insurer must pay GST on the entire amount of premium paid by the insured for the co-insurance services.
The reinsurer must pay GST on the gross reinsurance premium, including any deducted ceding or reinsurance commission.
The GST Council recommended regularising past GST payments for these transactions on an 'as is where is' basis for the period from July 1, 2017, to October 31, 2024.
The amendments were enacted via the Finance (No. 2) Act, 2024, and brought into force on November 1, 2024.
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