GST Exemption On 'Reinsurance Services' In Relation To Govt Insurance Schemes Applies With Retrospective Effect From July 01, 2017: Delhi HC

The Delhi High Court ruled that the GST exemption on reinsurance services related to government insurance schemes applies retrospectively from July 1, 2017. Although the exemption was notified on July 27, 2018, the government regularized GST liability for the period from July 1, 2017, to July 26, 2018. The court noted that the GST Council and the Union Government had taken a conscious decision to regularize this period. The case involved a foreign insurance company with reinsurance agreements for health insurance coverage under state government schemes. The court quashed a demand order issued for non-payment of IGST on reinsurance services for the specified period, emphasizing that the regularization of GST liability rendered the demand unsustainable. The ruling clarified the retrospective application of the exemption, providing relief to the petitioner.