India Customs Agency Issues Circular Clarifying Reversal of Input Tax Credit on Life Insurance Premiums

The Indian Central Board of Indirect Taxes and Customs June 26 posted online Circular No. 214/8/2024-GST, clarifying the reversal requirement of input tax credit (ITC) on the portion of the premium for life insurance policies that is not included in the taxable value. The clarification explains: 1) the definition of “life insurance business” under Section 2(11) of the Insurance Act, 1938; 2) that the premium amount for taxable life insurance policies, which is excluded from the taxable value under Rule 32(4) of the CGST Rules, doesn’t pertain to a non-taxable or exempt supply, thus not requiring the reversal of input ...