In re Kerala State Government Insurance Department (GST AAR Kerala)
The Goods and Services Tax (GST) Authority for Advance Rulings (AAR) in Kerala has addressed the taxability of insurance services provided by the Kerala State Government Insurance Department (KSID). The KSID, a state government department administering various insurance and benefit schemes, sought clarification on whether its services are exempt from GST and if it needs to retain its GST registration.
The AAR ruled that the insurance services provided by the KSID to employees of the State Government are exempt from GST. This exemption is granted under Entry No. 6 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, as amended. This notification generally exempts services provided by Central Government, State Government, Union Territory, or a local authority, with specific exclusions. The AAR noted that the services offered by KSID to government employees do not fall under these exclusions, such as speed post, express parcel post, or services provided to business entities, thus qualifying for the exemption.
However, regarding the continuation of the KSID’s GST registration, the AAR stated that a definitive ruling could not be issued. The AAR noted that the applicant failed to provide a comprehensive list of all goods and services it supplies. Under Section 23 of the CGST Act, persons exclusively engaged in supplying goods or services that are not liable to tax or are wholly exempt from tax are not required to obtain GST registration. While the AAR confirmed the exemption for insurance services to government employees, it could not ascertain if KSID engages in any other taxable supplies. Therefore, without a complete list of its activities, the AAR could not determine if the department’s entire business is exempt, which would then allow for the cancellation of its GST registration.
