Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement

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....claim settlement-reg. Ref:1. Central Circular No.217/11/2024-GST, dated 26.06.2024 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, New Delhi. *** The insurance companies, which are engaged in providing general insurance services in respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred by the policy holders and settle the claims in two modes i.e., Cashless or Reimbursement. 1.2 Under both modes of settlement, the insurance company accounts for repair liability (as assessed by the Surveyor/ Loss Assessor) as claim cost and is liable to make payment of approved repair charges to the garage. In both the cases,....

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.... availability of ITC in respect of repair expenses incurred in case of reimbursement mode of claim settlement. 2. In order to ensure uniformity in the implementation of the provisions of the law across field formations, the Chief Commissioner, in exercise of his powers conferred by section 168(1) of the Andhra Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the "APGST Act"), hereby clarifies the following: S.no Issue Clarification 1. The insurance companies, which are engaged in providing general insurance services in respect of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred by the policyholders and settle the claims in two modes i.e., Cashless or Reimbursem....

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.... to pay the consideration, where such consideration is payable for the said supply of goods or services or both. Moreover, as per section 2(31) of APGST Act, "consideration" includes any payment made or to be made in relation to supply of the goods or services or both, whether by the recipient or by any other person. In reimbursement mode of claim settlement, the payment is made by the insurance company for the approved cost of repair services through reimbursement to the insured. Further, irrespective of the fact that the payment of the repair services to the garage is first made by the insured, which is then reimbursed by the insurance company to the insured to the extent of the approved claim cost, the liability to pay for the repa....