re itc gst insurance

[Madhavan iyengar]

A company has paid for stock insurance ₹ 20000/- GST is ₹ 3600/- in FY 18-19 and claimed credit in return of ₹ 3600/-

In sept 19 the insurance company refunded ₹ 10000/- being excess collected

Query:

since company will book ₹ 10000 as misc income whether any gst implication on same

and whether ITC is required to be reversed

AI Summary

Company's GST ITC Unaffected by Insurance Refund; No Reversal Needed Due to Financial Credit Note Classification. A company paid 20,000 for stock insurance with a GST of 3,600 in FY 18-19, claiming the GST as input tax credit (ITC). In September 2019, the insurance company refunded 10,000 due to overpayment. The company queried whether there were GST implications or if ITC needed reversing. Respondents advised that since the GST on the refunded amount wasn't returned, ITC reversal is unnecessary. The refund is considered a financial credit note, not affecting GST liability or ITC. However, one opinion suggested reversing ITC if the supply was deemed not to have occurred, though lacking legal backing.