The GST Council’s 53rd meeting, held on June 22, 2024, introduced clarifications regarding the payment of GST on co-insurance premiums and re-insurance commissions. The activity of apportioning co-insurance premiums by the lead insurer to the co-insurer, in cases of joint insurance services, is now classified under Schedule III of the CGST Act, 2017. This classification ensures that these activities are not considered a supply of goods or services, provided the lead insurer pays GST on the full premium amount received from the insured.

Additionally, the services provided by an insurer to a reinsurer, where ceding or re-insurance commission is deducted from the premium paid to the reinsurer, have been addressed. The clarification aims to regularize the treatment of such transactions under GST, ensuring clear tax compliance for insurers involved in co-insurance and re-insurance arrangements.