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TMI BlogClarification on taxability of salvage/wreck value earmarked in the claim assessment of the damage caused to the motor vehicleX X X X Extracts X X X X X X X X Extracts X X X X ..... ) The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi has issued the above referred Circular. For the uniformity in implementation and in exercise of the powers conferred under section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). A copy of the above referred Circular is attached herewith as Annexure. Difficulty, if any, in implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ), hereby clarifies the issues as under: S.No. Issue Clarification 1. Whether the insurance company is liable to pay GST on the salvage/ wreckage value earmarked in the claim assessment of the damage caused to the motor vehicle? Under GST law, supply is the relevant taxable event for levying tax. For an activity/transaction to be liable to GST, existence of supply as defined under section 7 of CGST Act should be there. 2.1 Section 7 of CGST Act defines supply to mean all forms of supply of goods or services or both made or agreed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lvage/ wreckage buyers and the insured may select the best available offer for sale of wreckage or damaged car. The insured may also source quotes from open markets and dispose the wreckage or damaged car to such a buyer. In any case, the ownership of the wreckage vests with the insured and not with the insurance company. The same can be disposed by the insured either directly, or through the garage, or may not be disposed at all, as per his wish and choice. The deduction of the value of salvage from the insurance settlement amount, is as per the terms of the insurance contract, and cannot be said to be consideration for any supply being made by insurance company. Accordingly, in such cases, there does not appear to be any supply of salvage ..... X X X X Extracts X X X X X X X X Extracts X X X X
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