A New Tax System (Goods and Services Tax) Act 1999

78-30 Taxable supplies relating to settlements of insurance claims  
(1)
If, in settlement of a claim under an *insurance policy, an insurer:

(a) makes a payment of *money; or

(b) makes a supply; or

(c) makes both a payment of money and a supply;

the payment or supply is treated as *consideration for a supply made by the entity insured under the insurance policy, whether or not the payment or supply is made to that entity.

(2)
The supply made by the entity insured under the insurance policy is a taxable supply if the entity was entitled to an input tax credit for the premium it paid relating to the period during which the event giving rise to the claim happened.

(3)
It does not matter whether the entity is *registered, or *required to be registered, at the time of the settlement or at the time of the payment or supply by the insurer.

Note:

Subdivision 78-D deals with how GST applies to the taxable supply if the insured entity is not registered, or required to be registered.

(4)
However, the supply to the entity insured is not a *taxable supply to the extent (if any) that the *consideration for the supply is a taxable supply.

(5)
This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration).