The CBIC has issued certain circulars to implement decisions taken by the GST Council in 48th GST Council Meeting. Following are the Clarification of circulars issued on 27th Dec 2022.
Treatment of statutory dues under GST laws for proceedings under IBC 2016 (Circular No. 187/19/2022-GST)
If a confirmed GST liability demand is reduced because of NCLT order of insolvency of a tax payer, then he cannot be forced to pay more than such reduced liability. The government can recover only the reduced GST liability as clarified by circular.
The Commissioner is required to intimate about such reduction to the tax payer and the authority with whom recovery is pending in Form GST DRC-25.
Taxability of No Claim Bonus offered by insurance companies (Circular No. 186/18/2022-GST)
What is No Claim Bonus?
No claim bonus is a deduction made from gross insurance premium amount when no claim is made by the insured person during the previous insurance period(s).
Is No Claim Bonus in the nature of discount?
As the fact of availability of no claim bonus is already given in the policy documents and details of the no claim bonus is shown in the invoice, it can be considered as a discount.
What is the taxability of No Claim Bonus?
No claim bonus is deducted from the gross insurance premium while calculating taxable amount of insurance service.
Taxable amount of insurance service= Gross insurance premium – No claim bonus
Therefore, no tax is charged on ‘no claim bonus’.
Clarification on applicability of E-invoicing w.r.t an entity (Circular No. 186/18/2022-GST)
Exemption from mandatory generation of E-invoice is applicable to an entity as a whole. It does not depend on the nature of supply made by said entity.
Example: A banking company is exempted from mandatory issuance of E-Invoicing. Therefore, it will not be required to issue E-Invoice though it is providing goods or services other than banking services.