GST issues registers
Insurance industry partnership1 Operation of Division 78 and Division 11 in relation to the activities undertaken by insurers in the course of settling claims
Issue
In settling claims, insurers may pay the policy holder directly, or they may pay the supplier of goods or services for the supply of goods or services to the policy holder or other beneficiary of the policy.
Division 78 clearly applies in relation to the provision of money or digital currency to the policy holder. At issue is whether the insurer is entitled to an input tax credit under Division 11 where the payment is to a supplier of goods or services but the goods or services are supplied to the policy holder or other beneficiary. The Insurance Council of Australia (ICA) view is that the insurer is entitled to an input tax credit in such circumstances.
ICA has pointed to the UK case of Redrow in support of this view.
ATO view
Non-interpretative
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- See - GSTR 2006/10 Goods and services tax: insurance settlements and entitlement to input tax credits
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