GST Council is gearing up to reevaluate exempting reinsurance business from GST.
According to a certain report, this review is slated to take place post the general elections spanning from April 19 to June 1, 2024, aimed at electing the 543 members of the lower house of Parliament.
A senior government official indicated that the Council might issue a clarification asserting that reinsurance does not constitute a supply of service, thereby negating the application of an 18% GST on it.
Last year, several leading insurance companies allegedly found themselves embroiled in a predicament, having received notices for non-payment of GST on reinsurance premiums.
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"The GST’s fitment committee has already deliberated on the matter, proposing that reinsurance ought not to be treated as a supply, hence exempting it from GST," the official informed.
Anticipations are rife for the formation of a new government in early June, setting the stage for potential shifts in policy and taxation. Subsequently, the next GST Council meeting is anticipated to be convened toward the end of June, where the fate of reinsurance under the GST regime could be delineated.
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