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 ?

AI Summary

GST treatment of insurance compensation: compensation for loss of a fixed asset is not taxable as consideration in these circumstances.
Insurance compensation for complete loss of a fixed asset is not treated as consideration and therefore does not attract GST where no input tax credit was claimed on the asset; the receipt should be recorded in the assessee's accounts (eg, as a current asset) without giving rise to GST liability.