GST on Incentive amount to insurance agent

[SHARAD ANADA]

GST Query

General Insurance Agent got *incentive* for his performance in form of out of country trip with family and deducted TDS under section 194R of IT Act 1961.

Total incentive amount is Rs 22 lakh for each and every Agent. Is GST applicable on incentive amount? If yes then GST on RCM basis and insurance company will pay GST or is GST payable on forward charge basis and GST is to be paid by insurance Agent.

Insurance company debited such amount as Conference exp. in their books of accounts.

[GUNASEKARAN K]

Description of Supply of Service	Supplier of Goods	Recipient of Service
Services supplied by an insurance agent to any person carrying on insurance business	An insurance agent	Any person carrying on insurance business, located in the taxable territory

GST Payable by Insurance Company under Reverse Charge

[KASTURI SETHI]

Showing as conference expenses in the books of accounts will not serve any purpose. Actually, it is incentive expenses. RCM is applicable by the Insurance Company.

[KASTURI SETHI]

Such 'camouflaging' will not be digested by the department.

[Ganeshan Kalyani]

I agree with the views of the experts.

[Padmanathan KV]

I agree with experts, it is payable on RCM by insurance company.

AI Summary

Reverse charge on incentives to insurance agents: insurer liable to pay GST on agent-supplied services. The incentive paid to an insurance agent is a supply of services by the agent to a person carrying on insurance business; GST is payable under the Reverse Charge Mechanism by the insurance company as recipient. Labeling the payment as conference expenses does not change its character as an incentive subject to reverse charge; attempts to camouflage the payment are not dispositive. TDS under section 194R was deducted but does not affect the insurer's GST liability under reverse charge.