GST on insurance claim received

[KARAN VERMA]

Sir, motor vehilce car is damaged during accident.

Now, insurance company gave ₹ 3 lakhs as compensation. Whether assesse is required to pay any GST on insurance claim received ?

Further, beside insurance claim, car is old for ₹ 50,000 as scrap to buyer. There is loss on sale of car ₹ 2 lakhs as per Income tax Act. Whether assesee required to pay GST on car sale ?

AI Summary

Insurance compensation often qualifies as an actionable claim outside GST, while scrap sale of a vehicle attracts GST.
Compensation received from an insurer for vehicle damage is not automatically taxable GST consideration and is often characterised as an actionable claim outside taxable supply, but each receipt must be tested against the Supply and Consideration concepts to determine taxability. The sale of the damaged vehicle as scrap constitutes a supply of goods and is subject to GST regardless of any loss for income-tax purposes.