In a significant relief 13 insurance companies, the Bombay High Court has stayed over ₹10,000 crore in GST demands raised on co-insurance and reinsurance transactions.

A Division Bench of Justices G.S. Kulkarni and Aarti Sathe ordered an ad-interim stay on the impugned demand orders until the next hearing. The court was hearing a batch of writ petitions filed by Aditya Birla Health Insurance, Oriental Insurance, SBI General Insurance, IFFCO Tokio General Insurance, Generali Central Insurance, Universal Sompo General Insurance, IndusInd General Insurance, Tata AIG General Insurance and Raheja QBE General Insurance.

The dispute centres on the levy of GST on co-insurance premiums and ceding commissions. The petitioners argued that the demands run contrary to circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) on October 11, 2024 and January 28, 2025. These circulars, issued pursuant to a decision of the GST Council, excluded co-insurance premiums and ceding commissions from GST and provided for regularisation of past demands on an “as-is-where-is” basis.

The insurers also pointed out that identical demands had already been dropped by tax authorities in Meerut, Delhi, Pune and Mumbai in line with the CBIC circulars, while the impugned orders adopted a contrary approach. Taking note of this, and with the GST Council impleaded in the matter, the High Court directed the tax department to place the dropped orders on record.

Source: The Hindu businessline