ITC Entitlement for Motor Vehicle Repair Expenses in Insurance Reimbursement Claims

Last updated: 28 June 2024

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This notification clarifies the entitlement of Input Tax Credit (ITC) for insurance companies regarding motor vehicle repair expenses. It explains that under both cashless and reimbursement claim settlement modes, insurance companies can claim ITC on repair services. This applies when garages issue invoices in the insurance company's name, regardless of whether the insured pays the garage first and is then reimbursed.

F. No. CBIC-20001/4/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing ***** North Block, New Delhi Dated the 26th June, 2024 To, The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax (All) The Principal Directors General / Directors General (All) Madam/Sir, Subject: Entitlement of ITC by the insurance companies on the expenses incurred fo

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FAQ :

The notification concerns the entitlement of Input Tax Credit (ITC) for insurance companies on expenses incurred for the repair of motor vehicles in reimbursement mode insurance claims.

The two modes are Cashless and Reimbursement.

Invoices are generally issued by the garages in the name of the insurance companies.

Yes, insurance companies may be availing input tax credit (ITC) on the tax paid in respect of repair services provided by garages in the Reimbursement Mode of claim settlement, provided invoices are issued in their name.

No, the notification indicates that ITC entitlement applies to both Cashless and Reimbursement modes, based on invoices issued in the insurance company's name.