AXA France Vie-India Vs Union of India & Ors. (Delhi High Court)
Delhi High Court held that all reinsurance services with respect to government insurance services were exempt from levy of GST with effect from 1st July 2017. Notably, GST liability on services between period 1st July 2017 and 26th July 2018 is regularized on ‘as is where is basis’.
Facts- The petitioner is a leading multinational insurance company which is also registered as a foreign reinsurance branch with the Insurance Regulatory and Development Authority of India. It also holds a registration issued by the Ministry of Corporate Affairs, Government of India under the category of foreign companies.
Notably, on 18 January 2018, the GST Council introduced a new entry in Notification No.12/2017 dated 28 June 2017 exempting reinsurance services when offered in relation to government insurance schemes.
The petitioner was principally aggrieved by the impugned order dated 20 December 2023 which created a demand for the period 01 July 2017 to 25 July 2018 in respect of non-payment of IGST on reinsurance services.
Conclusion- Held that a clarificatory Circular came to be issued by the Department of Revenue in the Ministry of Finance on 15 July 2024 and insofar as GST liability on reinsurance is concerned it was clarified that as recommended by the GST Council, GST liability on the services by way of reinsurance of the insurance schemes specified in Sl. Nos. 35 and 36 of notification No. 12/2017-CT(R) dated 28.06.2017 is regularized for the period from 01.07.2017 to 24.01.2018 on ‘as is where is’ basis.” The GST Council as well as the Union Government, thus appear to have taken a conscious decision to regularize the period between 01 July 2017 and 26 July 2018.
