The Bombay High Court has provided temporary relief to several insurance companies, including ICICI Lombard General Insurance, Aditya Birla Health Insurance, and Tata AIG General Insurance, by staying Goods and Services Tax (GST) demands on co-insurance premium and ceding commission. The court’s decision was based on the argument that the levy was contrary to circulars issued by the Central Board of Indirect Taxes and Customs (CBIC). The insurance companies had approached the court challenging orders passed by GST authorities in Palghar, Maharashtra, confirming the GST demands.<\/p>\n
The petitioners, represented by senior advocates Arvind Datar and Rohan Shah, argued that the demands were in violation of CBIC circulars dated October 11, 2024, and January 28, 2025, which were issued pursuant to decisions made by the GST Council. They also pointed out that similar GST demands had been dropped by jurisdictional officers in other cases in Meerut, Delhi, Pune, and Mumbai, following the CBIC circulars. The court was shown an order from one such case to demonstrate the consistent departmental approach elsewhere.<\/p>\n
The Directorate General of GST Intelligence had investigated over two dozen insurance companies for allegedly creating shell entities to pay excess commissions and misclassifying expenses to reduce GST liability. The Income Tax Department had also conducted parallel investigations into alleged tax evasion and violations of Insurance Regulatory and Development Authority of India rules. The GST probe focused on alleged fake input tax credit and misclassification of expenses, while the income tax investigation examined suspected tax evasion arising from commission payments in excess of regulatory limits.<\/p>\n
The court’s decision has provided much-needed relief to the industry, according to Amit Maheshwari, managing partner at CA firm AKM Global. The court’s intervention highlights the importance of predictable tax administration and consistent field-level implementation. The ad-interim stay will remain in place until the next date of hearing, which is scheduled for after the respondents file their reply affidavits by February 12. The insurance companies will have to wait until then to know the final outcome of their petitions.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Bombay High Court has provided temporary relief to several insurance companies, including ICICI Lombard General Insurance, Aditya Birla Health Insurance, and Tata AIG General Insurance, by staying Goods and Services Tax (GST) demands on co-insurance premium and ceding commission. The court’s decision was based on the argument that the levy was contrary to circulars […]<\/p>\n","protected":false},"author":1,"featured_media":221307,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[41,17,22,64],"tags":[],"class_list":["post-222732","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aditya-birla","category-icici-lombard","category-insurance","category-tata-aia"],"jetpack_featured_media_url":"https:\/\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/tata-aia.jpeg","jetpack_shortlink":"https:\/\/wp.me\/p9ibIB-VWs","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":222734,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/25\/bombay-high-courts-stay-brings-gst-relief-to-over-a-dozen-insurers\/","url_meta":{"origin":222732,"position":0},"title":"Bombay High Court’s stay brings GST relief to over a dozen insurers","author":"Team Small News","date":"January 25, 2026","format":false,"excerpt":"The Bombay High Court has granted a temporary stay on a substantial demand and associated penalties by the Goods and Services Tax (GST) authorities, providing relief to over a dozen insurance companies. The insurance companies, including Aditya Birla Health Insurance, Oriental Insurance, and ICICI Lombard General Insurance, among others, had\u2026","rel":"","context":"In "Aditya Birla"","block_context":{"text":"Aditya Birla","link":"https:\/\/smallnews.in\/insurance\/category\/aditya-birla\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222544,"url":"https:\/\/smallnews.in\/insurance\/2025\/12\/30\/on-october-8-2025-insurance-agents-and-associations-are-likely-to-raise-the-issue-of-goods-and-services-tax-gst-with-the-insurance-regulatory-and-development-authority-of-india-irdai-and-the-fin\/","url_meta":{"origin":222732,"position":1},"title":"On October 8, 2025, insurance agents and associations are likely to raise the issue of Goods and Services Tax (GST) with the Insurance Regulatory and Development Authority of India (IRDAI) and the Finance Ministry.","author":"Team Small News","date":"December 30, 2025","format":false,"excerpt":"The insurance industry in India is facing a significant issue related to the Goods and Services Tax (GST) and Input Tax Credit (ITC). Private insurers have reduced distributor payouts by 15-18% to offset the loss of ITC, following the GST exemption on life and health insurance premiums. This move is\u2026","rel":"","context":"In "Aditya Birla"","block_context":{"text":"Aditya Birla","link":"https:\/\/smallnews.in\/insurance\/category\/aditya-birla\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222751,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/28\/insurers-to-charge-18-gst-on-agents-commission-input-tax-credit-issue\/","url_meta":{"origin":222732,"position":2},"title":"Insurers to charge 18% GST on agents’ commission, Input Tax Credit issue","author":"Team Small News","date":"January 28, 2026","format":false,"excerpt":"The Indian government's decision to reduce the Goods and Services Tax (GST) on health insurance premiums from 18% to 0% has had an unintended consequence on the insurance industry. Insurers are now imposing an 18% GST on commissions paid to agents and distributors to offset losses from the withdrawal of\u2026","rel":"","context":"In "Aditya Birla"","block_context":{"text":"Aditya Birla","link":"https:\/\/smallnews.in\/insurance\/category\/aditya-birla\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":222524,"url":"https:\/\/smallnews.in\/insurance\/2025\/12\/27\/the-insurance-industry-is-seeking-government-assistance-to-extend-input-tax-credit-itc-benefits-to-include-distribution-costs-and-renewals-according-to-the-ceo-of-aditya-birla-sun-life-insurance\/","url_meta":{"origin":222732,"position":3},"title":"The insurance industry is seeking government assistance to extend Input Tax Credit (ITC) benefits to include distribution costs and renewals, according to the CEO of Aditya Birla Sun Life Insurance.","author":"Team Small News","date":"December 27, 2025","format":false,"excerpt":"The life insurance industry in India is planning to approach the government with new demands after the GST Council recently exempted individual life and health insurance policies from tax. The industry's primary request is to extend input tax credit (ITC) benefits to distribution costs and renewal premiums of past policies,\u2026","rel":"","context":"In "Aditya Birla"","block_context":{"text":"Aditya Birla","link":"https:\/\/smallnews.in\/insurance\/category\/aditya-birla\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222650,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/11\/health-insurers-fuel-non-life-premium-growth-due-to-gst-benefits\/","url_meta":{"origin":222732,"position":4},"title":"Health insurers fuel non-life premium growth due to GST benefits.","author":"Team Small News","date":"January 11, 2026","format":false,"excerpt":"The non-life insurance industry in India experienced a significant boost in December, with a 14% year-on-year increase in gross direct premium collections, reaching \u20b928,446.82 crore. This growth is the second-strongest monthly expansion in the industry, following a substantial 24.2% jump in November. The main driver behind this surge was the\u2026","rel":"","context":"In "HDFC ERGO"","block_context":{"text":"HDFC ERGO","link":"https:\/\/smallnews.in\/insurance\/category\/hdfc-ergo\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/smallnews.in\/insurance\/wp-content\/uploads\/sites\/5\/2025\/04\/Star-Health-Insurance-logo.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":222592,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/04\/care-health-insurance-has-emerged-victorious-in-a-gst-appeal-successfully-overturning-a-liability-of-rs-23-41-lakh\/","url_meta":{"origin":222732,"position":5},"title":"Care Health Insurance has emerged victorious in a GST appeal, successfully overturning a liability of Rs 23.41 lakh.","author":"Team Small News","date":"January 4, 2026","format":false,"excerpt":"In a significant victory, Care Health Insurance has successfully appealed against a Goods and Services Tax (GST) liability of Rs 23.41 lakh. 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