INPUT CREDIT

[janakiram g]

Sir/Madam

I am working for General Insurance Company. As a part of our business, we need to settle all sorts of claims for which premium collected by us. Motor claims which is one of department in General insurance business where claim settlement involves cost of replacement of parts and Labour charges for repairing the vehicle etc. When a vehicle met with accident, repair of such vehicle will normally done at Authorised Dealer/ Authorised repairer who levies Service Tax (ST ) on labour charges for repairing vehicle. Dealer raises all bills - parts and labour charges, in the name of Insured. These claims ( Motor Accidental Claims ) paid either to Insured or Dealer directly. When we settle these claims to insured / dealer, whether ST charged on labour can be claimed as Input credit by our company. Kindly Clarify.

AI Summary

Insurance Firm Ineligible for Input Credit on Service Tax for Vehicle Repair Labor Charges Under Motor Accident Claims An individual working for a general insurance company inquired about the eligibility of claiming input credit on service tax levied on labor charges for vehicle repairs related to motor accident claims. The repairs are conducted by authorized dealers who bill the insured party, and the claims are settled by the insurance company either directly to the insured or the dealer. A respondent clarified that the insurance company is not eligible to claim such input credit on the service tax charged for labor.