CBIC Circular on Reversal of Input Tax Credit for Life Insurance Premiums

CBIC Circular on Reversal of Input Tax Credit for Life Insurance Premiums

The CBIC has issued Circular No. 214/8/2024-GST dated June 26, 2024, providing clarity on the requirement of reversing input tax credit concerning the portion of premiums for life insurance policies that are not included in taxable value.

Background: The circular addresses concerns raised by stakeholders regarding whether the portion of insurance premiums, which under Rule 32(4) of the CGST Rules, is not considered in the taxable value for life insurance business, should be treated as pertaining to an exempt or non-taxable supply. This clarification aims to ensure consistency in the application of GST laws across different field formations.

Key Clarifications:

Stakeholders are encouraged to disseminate the contents of this circular through suitable trade notices for broader understanding and compliance.

For further details, refer to Circular No. 214/8/2024-GST dated June 26, 2024, accessible here

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