Subject: Regularizing payment of GST on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding /re-insurance commission deducted from the reinsurance premium paid by the insurer to the reinsurer – reg.
The GST Council has clarified on the regularization of the payment of GST on:
Co-insurance Premium Apportionment: The activity of apportioning co-insurance premiums by the lead insurer to co-insurers are neither considered a supply of goods nor services, provided GST is paid by the lead insurer on the entire premium.
Reinsurance Commission: Services where ceding or reinsurance commissions are deducted from the reinsurance premium are also not deemed as supply, with the condition that the reinsurer pays GST on the gross premium including commissions.
GST Council has clarigied that these regulations shall apply retroactively from 01.07.2017 to 31.10.2024 on an ‘as is where is; basis, following the recommendations from the 53rd GST Council meeting. The changes were formalized through amendments in the CGST Act, effective from 01.11.2024.
