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GST on insurance claim received, Goods and Services Tax - GST

Issue Id: - 116963
Dated: 14-1-2021
By:- KARAN VERMA
GST on insurance claim received

  • Contents

Sir, motor vehilce car is damaged during accident.

Now, insurance company gave ₹ 3 lakhs as compensation. Whether assesse is required to pay any GST on insurance claim received ?

Further, beside insurance claim, car is old for ₹ 50,000 as scrap to buyer. There is loss on sale of car ₹ 2 lakhs as per Income tax Act. Whether assesee required to pay GST on car sale ?

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Posts / Replies

Showing Replies 1 to 7 of 7 Records

1 Dated: 14-1-2021
By:- KASTURI SETHI

Compensation is not income and hence not consideration.

Sale of old and used car as scrap is subject to GST.


2 Dated: 14-1-2021
By:- KARAN VERMA

It means whatever compensation received from insurance company for damage of vehicle is exempt from GST.

Kindly provide any notification or rule.


3 Dated: 15-1-2021
By:- KASTURI SETHI

Every kind of compensation amount is NOT NON-TAXABLE. You will have to examine each and every case. Go deep into the definition of 'Supply' and 'Consideration' under GST. Also literal and legal meaning of the word, 'compensation'. You will not find direct and clear cut any authority on this issue.


4 Dated: 15-1-2021
By:- Ganeshan Kalyani

GST is not applicable on compensation received from insurance company.


5 Dated: 25-1-2021
By:- KARAN VERMA

Sir

Whether we can say that insurance claim is actionable claim which is outside the purview of GST as per Schedule-III. Here are some examples of Actionable claim-

1. Claim for arrear rent.

2. Claim for rent to fall due in future.

3. A choice offered to repurchase the property once again.

4. Book debts or claims

5. The right to claims maintenance.

6. Claim the benefit of the contract.

7. Deposit receipt.


6 Dated: 27-1-2021
By:- KASTURI SETHI

Yes. Insurance claim is actionable claim. I agree with you.


7 Dated: 27-1-2021
By:- KARAN VERMA

Thank you sir for your views.


1

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