This circular provides clarification on certain GST-related issues to ensure uniform application of law across field formations, particularly in relation to insurance services and e-invoicing requirements.

With respect to No Claim Bonus (NCB) offered by insurance companies, the circular clarifies that NCB is not a consideration for any supply made by the insured to the insurer. The insured is under no contractual obligation to refrain from making insurance claims in return for NCB, and therefore, no supply arises from such conduct. Further, it is clarified that NCB qualifies as a permissible discount under section 15(3)(a) of the CGST Act, provided it is disclosed in the insurance policy and reflected in the invoice. Accordingly, GST is payable only on the net insurance premium actually charged after deduction of NCB.

The circular also clarifies the scope of exemption from mandatory generation of e-invoices under Notification No. 13/2020–Central Tax, as amended. It is clarified that the exemption applies to the entity as a whole and not supply-wise. Therefore, if an entity is exempt from e-invoicing, it is not required to generate e-invoices for any of its supplies, irrespective of the nature of goods or services supplied.

These clarifications aim to remove ambiguity and facilitate consistent GST compliance by taxpayers and tax authorities.