The Indian insurance sector could see relief from taxes as the Goods and Services Tax (GST) Council plans to review the exemption for reinsurance after the elections, according to a Moneycontrol report.

In an effort to avoid disrupting insurance industry practices, a senior government official suggested that the GST Council may clarify that reinsurance should not be considered a service subject to GST.

Last year, numerous top insurance companies reportedly received notices for failing to pay GST on reinsurance premiums.

The government official told Moneycontrol that, “The GST’s fitment committee has already discussed the issue and it is proposed that reinsurance should not be treated as supply and hence no GST should be applicable on it.”

“The fitment committee proposal is kept ready to be placed before the GST Council in the next meeting after the elections. The issue of whether reinsurance is a supply will be placed in the next GST meeting. The new government is likely to be formed in early June. The GST Council meeting may happen in June-end.”

“Supply may have been made but the GST is already paid on it, so it is proposed to not consider it as supply. This is the conclusion arrived at by the fitment committee,” the official added.

Source: Money Control