TREATMENT OF GST ON INSURANCE CLAIMS

[ROHIT GOEL]

Dear Sirs,

One of our client is running an educational institution and is registered in GST because of rental income received in same PAN. Now assessee has received an insurance claim against complete loss of a fixed asset and it is relevant to mention that no input tax credit has been claimed on the purchase of such assets. Whether insurance claim recieved is taxable in GST ?

[KASTURI SETHI]

In this scenario, such compensation is not income/consideration and hence GST is not applicable. This is my view.

[Ganeshan Kalyani]

Yes it is not a consideration hence not taxable.

[YAGAY andSUN]

Being compensation in nature against the Fixed Asset loss, therefore, cannot be treated at par with the consideration. However, in your B/S this compensation received will be treated as current asset.

[Himansu Sekhar]

There will no no GST on the same because you have not taken ITC on the same.

AI Summary

Insurance Claim on Fixed Asset Loss Not Taxable Under GST; Considered Compensation, Not Income or Consideration An educational institution registered under GST due to rental income received an insurance claim for the complete loss of a fixed asset. The query was whether this insurance claim is taxable under GST, given no input tax credit was claimed on the asset's purchase. All respondents agreed that the insurance claim is not taxable under GST as it is compensation, not income or consideration. It should be recorded as a current asset in the balance sheet.