Input credit of GST in Case of Accident claim

[Yogesh Ashar]

Dear Sir

In case of transporter who is charging GST on forward charge basis @12%, the query is in reference to insurance claim received on accident of truck. The Insurance company settled @75% of the amount. 25% is borne by the transporter. The amount billed by the repairer is in the name of the Company, where he has billed for the total amount.

Queries

1. Whether any GST has to be charged to the Insurance Company and accordingly a tax invoice needs to be raised for the 75% amount settled by the Insurance company

2. Whether full ITC can be claimed by the Tranporter

3. Whether it will have to reverse 75% of the ITC

Thanks

AI Summary

Insurance payments as consideration may require GST input tax credit reversal when insurer pays for supplier on behalf of recipient
Whether insurance payments made to a supplier for repair of a transport vehicle constitute consideration for GST purposes and the consequent effect on input tax credit (ITC) is contested: one view requires proportionate reversal of ITC because the insurer's payment reduces the transporter's outlay; another treats the insurer's payment as compensation, not consideration, arguing no GST or ITC reversal is necessary, raising ancillary questions on tax invoice issuance and apportionment of credit.