48th GST Council Meet: GST Not Applicable On No Claim Bonus Offered By Insurance Companies

The 48th Meeting of the GST Council was held on 17th December 2022 through Video Conference, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The council recommended that no claim bonus by insurance companies will not attract GST.

"Circular to be issued to clarify that No Claim Bonus offered by the insurance companies to the insured is an admissible deduction for valuation of insurance services," the press release read.

GST is levied only on the actual insurance premium amount, after deducting the no-claim bonus, that policyholders pay to the insurer in exchange for insurance services.

A No Claim Bonus, also known as an NCB, is a reward given by an insurance company to an insured for not filing any claims during the policy year. The NCB is a discount that ranges from 20% to 50% and is given to the insured when they renew their policy. During renewal, the NCB discount is applied to the premium amount. This discount is transferable and can be used if the policyholder purchases a new vehicle.

Click Here To Read The Press Release