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2024 (7) TMI 353 - AAR - GSTExemption from GST - health insurance services provided by the Applicant to Tamil Nadu State Government (TNSG) - Serial Number 40 of the N/N. 12/2017-Central Tax (Rate) dated 28th June 2017 and corresponding TNGST Notification - Insurance services - Serial No. 36A of the Notification 12/2017 - Input tax credit. Does the health insurance services provided by the Applicant Tamil Nadu State Government (TNSG) is exempted from GST under the SI.No. 40 of Notification No, 12/2017 Central Tax (Rate) dated 28th June, 2017 and corresponding TNGST Notification? - HELD THAT - On perusal of the agenda notes, minutes of the meeting and clarification issued, clearly establishes that the intention of the GST Council is to grant exemption on the general insurance services provided to the State Government, where total premium is paid by the Government and also in respect service provided by the State Government by way of general insurance (managed by Government) to employees of the State Government/ Police Personnel, employees of electricity department or students. While the former fall under SI. No. 40 and the latter under Sl. No. 6 of the Notification No. 12 /2017-Central Tax (Rate) - In the case of applicant, the supply of insurance is made only to the Government of Tamil Nadu for which total premium is paid by the Government and therefore it would be eligible for exemption under SI. No. 40 of the Notification No. 12/2017-Central Tax (Rate). It may be not relevant to the issue raised by tire applicant but it is to be recorded here that Government of Tamil Nadu is managing the insurance scheme called New Health Insurance Scheme and therefore, the recovery made by the Government from employees/ pensioner would also be exempt, in terms of entry 6 of Notification No. 12/2017-Central Tax (Rate). Exemption status of reinsurance of the health insurance policy - HELD THAT - The supply of goods or services is not being undertaken or proposed to be undertaken by the applicant as the applicant is the recipient of reinsurance service and the supply is being undertaken or proposed to be undertaken by the suppliers of reinsurance service providers, located in India - with respect to receipt of re-insurance service from re-insurers located outside India, as the liability to pay tax lies with the applicant, this is answered and which is answered in affirmative in terms of exemption provided under SI No. 36A of Notification No. 12/2017 Central Tax (Rate), dated 28-06-2017, as the supply of insurance service to Tamil Nadu State Government falls under entry 40 of Notification No. 12/2017 Central Tax (Rate), dated 28-06-2017. Reversal of ITC - HELD THAT - The applicant has not provided any detailed explanations on the circumstances under which reversal of input tax credit is warranted. However, as the CGST Act, 2017 itself provides for vivid answer in the provisions of sub-section (2) of section 17 of the CGST Act, 2017 and also in Rule 42 of the CGST Rules, 2017 the applicant can follow these provisions for reversal of input tax credit and no ruling is required therein.
Issues Involved:
1. Taxability of health insurance services provided to Tamil Nadu State Government (TNSG). 2. Exemption status of reinsurance of the health insurance policy. 3. Valuation of insurance services if held taxable. 4. Eligibility for Input Tax Credit (ITC) if insurance services are taxable. Issue-wise Detailed Analysis: 1. Taxability Issue: - Question 1.1: The applicant sought a ruling on whether the health insurance services provided to TNSG are exempt from GST under Serial Number 40 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017. - Findings: The applicant provides a group health insurance policy to TNSG, covering employees and their families. The Tamil Nadu Government pays the premium, and the applicant has no contractual relationship with the employees. The exemption under Serial No. 40 applies if the service is provided to the government and the total premium is paid by the government. - Ruling: The health insurance services provided to TNSG are exempt from GST under Serial Number 40 of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017. - Question 1.2: If the health insurance services are exempt, is the reinsurance of the health insurance policy also exempt under Serial No. 36A of Notification 12/2017? - Findings: The applicant is required to undertake reinsurance as per IRDA norms. The reinsurance services are provided by both domestic and foreign reinsurers. - Ruling: Reinsurance services received from reinsurers located outside India are exempt under Serial No. 36A of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017. The question regarding reinsurance services from domestic reinsurers is outside the scope of advance ruling. 2. Alternate Questions - Valuation: - These questions were contingent on the insurance services being taxable. Since the primary question was answered affirmatively (i.e., the services are exempt), these questions do not require a ruling. 3. Alternate Questions - Input Tax Credit (ITC) Issues: - These questions were also contingent on the insurance services being taxable and the amount received from TNSG being treated as a subsidy. Since the primary question was answered affirmatively, these questions do not require a ruling. 4. Reversal of ITC: - Question 3.3: The applicant asked if any reversal of ITC is warranted. - Findings: The applicant did not provide detailed explanations, but the CGST Act, 2017 and Rule 42 of the CGST Rules, 2017 provide guidance on the reversal of ITC. - Ruling: The applicant should follow the provisions of sub-section (2) of section 17 of the CGST Act, 2017 and Rule 42 of the CGST Rules, 2017 for reversal of ITC. Ruling Summary: - Question 1.1: The health insurance services provided to TNSG are exempt from GST. - Question 1.2: Reinsurance services received from reinsurers located outside India are exempt. The question regarding domestic reinsurers is not answered as it is outside the scope of advance ruling. - Questions 2 and 3: These questions do not require a ruling as the primary question was answered affirmatively. - Reversal of ITC: The applicant should follow the relevant provisions of the CGST Act and Rules.
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