The GST Council of India, chaired by Finance Minister Ms Nirmala Sitharaman, has clarified that no tax will be levied on co-insurance premiums and reinsurance commissions under the GST law.
The Council said that co-insurance and reinsurance do not represent a new supply of service.
The move provides relief amounting to over INR180bn ($2.15bn) to the general insurance sector, according to the General Insurance Council (GI Council), the apex body of general insurance companies in India.
The GST relief came after the GI Council lobbied hard for the decision, as it actively engaged in gathering industry feedback, organising sessions with insurance players and tax consultants, and coordinating meetings with the Revenue Secretary, Ministry of Finance.