In a temporary relief for leading insurance firms, the Bombay High Court on Friday reportedly granted an interim stay on GST demands amounting to more than Rs 10,000 crore. The GST demands pertained to 13 insurance companies over co-insurance premiums and ceding commission payments.
The matter has been scheduled for the next hearing on Feb. 18, according to an Economic Times report. Among the insurers gaining relief are Aditya Birla Health Insurance, SBI General, ICICI Lombard, Oriental Insurance, TATA AIG, IFFCO Tokio, Generali, Universal Sompo, Zuno General, IndusInd General Insurance, and Bharti Management Services.
The dispute centres on co-insurance premiums and ceding commissions, which insurers exchange when sharing the risk on large policies. The Goods and Services Tax (GST) authorities sought to impose tax on these payments, but the insurers contended that the claims conflict with CBIC circulars issued in October 2024 and January 2025. These guidelines, reflecting GST Council decisions, specify that such transactions are exempt from GST.
The court observed that Central Board of Indirect Taxes and Customs (CBIC) circulars, issued following a GST Council decision, clarify that such transactions do not attract GST. Citing this position, the high court ordered a stay on the recovery of the contested tax dues.
The development echoes a separate Bombay High Court order on Thursday, offering Himesh Foods, the parent company of Mad Over Donuts brand in India, a stay on Rs 57.29 crore in GST dues and associated fines.
In this case, the Directorate General of GST Intelligence (DGGI) had sent a show-cause notice arguing that over-the-counter doughnut sales didn’t qualify as restaurant services, making them subject to 18% GST rather than the 5% rate Himesh Foods had applied. The company contested the notice in the Bombay High Court.
In 2025, the GST Appellate Authority confirmed the Rs 57.29 crore GST liability and levied a penalty, prompting an immediate appeal from the company.
Citing a prior ruling that offered temporary relief in a similar case, the division bench of Justices G S Kulkarni and Aarti Sathe reportedly ruled that equal treatment demanded the same here. They stayed the adjudication order and scheduled a final hearing for Feb. 26.
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