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

Input Tax Credit reversal may not be required where a supplier issues a financial credit note without GST.
Whether reversal of input tax credit arises when an insurer refunds excess premium but does not refund the corresponding GST. If the insurer issues a financial credit note without GST the refund is an adjustment to the original supply and reversal of ITC is not required; if a credit note carries GST the supplier must account for GST on that credit note. A contrary position suggests the entitlement proviso could require reversal if the supply is treated as not having occurred.