In a significant relief 13 insurance companies, the Bombay High Court has stayed over ₹10,000 crore in GST demands raised on co-insurance and reinsurance transactions.
A Division Bench of Justices G.S. Kulkarni and Aarti Sathe ordered an ad-interim stay on the impugned demand orders until the next hearing. The court was hearing a batch of writ petitions filed by Aditya Birla Health Insurance, Oriental Insurance, SBI General Insurance, IFFCO Tokio General Insurance, Generali Central Insurance, Universal Sompo General Insurance, IndusInd General Insurance, Tata AIG General Insurance and Raheja QBE General Insurance.
The dispute centres on the levy of GST on co-insurance premiums and ceding commissions. The petitioners argued that the demands run contrary to circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) on October 11, 2024 and January 28, 2025. These circulars, issued pursuant to a decision of the GST Council, excluded co-insurance premiums and ceding commissions from GST and provided for regularisation of past demands on an “as-is-where-is” basis.
The insurers also pointed out that identical demands had already been dropped by tax authorities in Meerut, Delhi, Pune and Mumbai in line with the CBIC circulars, while the impugned orders adopted a contrary approach. Taking note of this, and with the GST Council impleaded in the matter, the High Court directed the tax department to place the dropped orders on record.
Commenting on the ruling, Amit Maheshwari, Managing Partner at AKM Global, said the ad-interim stay comes at a critical time for the insurance industry, offering immediate relief from large GST demands that had cast a shadow over operations. He noted that the GST Council had already clarified the position on co-insurance premiums and ceding commissions, which was subsequently implemented through CBIC circulars.
“The order reinforces that such circular-based guidance cannot be ignored during assessment proceedings,” Maheshwari said. He added that the stay would help preserve insurers’ cash flows and underscores the need for consistent application of CBIC circulars while the broader legal issues are examined on merits.
Published on January 23, 2026
