CBIC issues Clarification on ITC incurred on Motor Vehicle Repair Expenses under Reimbursement mode of

The CBIC issued a clarification regarding the eligibility of Input Tax Credit (ITC) on motor vehicle repair expenses under the reimbursement mode of insurance claim settlement. The circular emphasizes that ITC can be claimed only when the insurer pays the repairer directly. If the insured initially pays and later gets reimbursed by the insurer, ITC cannot be claimed on the repair expenses. This clarification aims to streamline ITC claims and ensure compliance with GST laws regarding input tax eligibility under insurance claim settlements.