Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in taxable value.
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Input tax credit reversal not required where valuation-excluded premium portion in life policies is not an exempt supply. The circular clarifies that the portion of life insurance premium excluded from taxable value under the life-insurance valuation rule does not constitute an exempt or non-taxable supply; it results from valuation methodology only. Consequently, that excluded premium portion does not trigger reversal of input tax credit under the GST reversal provisions and related rules applicable when supplies are for exempt or non-taxable purposes.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Input tax credit reversal not required where valuation-excluded premium portion in life policies is not an exempt supply.
The circular clarifies that the portion of life insurance premium excluded from taxable value under the life-insurance valuation rule does not constitute an exempt or non-taxable supply; it results from valuation methodology only. Consequently, that excluded premium portion does not trigger reversal of input tax credit under the GST reversal provisions and related rules applicable when supplies are for exempt or non-taxable purposes.
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