Taxation of Corporate agent to insurance company

[Tushara Nair]

How is GST applicable for Corporate agents to insurance company? Is it on RCM basis wherein the insurance company would pay tax or on the basis of forward charge where in the corporate agent is liable to pay tax.Is there is any circular pertaining to this by the Finance ministry.

[Alkesh Jani]

Sir,

In this regards, please refer Notification No.13/2017 dated 28-06-17 as amended from time to time. The relevant portion is reproduced below:-

“the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as specified in column (4) of the said Table”.

Further, Sl.No.7 of the said Notification states that liability is on the “Any person carrying on insurance business, located in the taxable territory”. The definition of “a person” is given at Section 2(84) of CGST Act, 2017 and it includes “a company”. On conjoint reading it ample clear that although you are company, the liability to pay GST is on Any person carrying on insurance business, i.e. Insurance company.

Our experts may correct me if mistaken.

Thanks

[Ganeshan Kalyani]

A corporate agent is liable to pay tax.

AI Summary

Reverse charge: GST for corporate agents to insurers may be payable by the insurer under the notification, though views differ. The dispute concerns whether GST for services by a corporate agent to an insurance company is payable on reverse charge by the insurer under Notification No.13/2017, which lists recipients as 'any person carrying on insurance business' (with 'person' including a company), versus the opposing view that the corporate agent must pay GST under forward charge.