TaxTMI 
TaxTMI 
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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....r No. 217/11/2024-GST, dated 26.06.2024, issued by Government of India, Ministry of Finance, Department of Revenue, CBIC, GST Policy Wing. ****** In the reference cited, the Government of India, Ministry of Finance, Department of Revenue CBIC, GST Policy Wing, has issued Circular No 217/11/2024-GST, dated 26.06.2024 based on the recommendations of the GST Council. Hence, following pari-materia circular is issued. 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 in....
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....to the insurer. Accordingly, it is being claimed that ITC of repair invoices, in such cases, should not be available to the insurance companies. 1.4 Request has been received by the GST Council seeking clarity on 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 Commissioner, in exercise of powers conferred by section 168 of the Tamilnadu Goods and Services Tax Act, 2017 (hereinafter referred to as the "TNGST Act"), hereby clarifies the following: S. No. Issue Clarification 1. The insurance companies, which are engaged in providing general insurance ....
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....amount shall be credited to the electronic credit ledger of such person. Further, section 2(93) of TNGST Act defines "recipient" of supply of goods or services or both, as the person who is liable 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 TNGST 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 r....