LIC Maturity Sum given to directors exempted from GST

LIC Maturity Sum given to directors exempted from GST

While issuing a ruling that the salary of directors does not attract the Goods and Services Tax, the Authority for Advance Ruling in Karnataka also held that if the director of a company is in receipt of various types of income such as partner’s salary, salary as director from Private Limited company, the LIC Policy maturity amount, then the same does not attract GST. This also includes LIC maturity sum. The Karnataka AAR bench held that impugned income received on maturity of the insurance policies would not attract GST as the insurance premium of policies is taxable under GST under the consideration of services provided by insurance companies. Therefore, on the maturity of the policy, there would not be any service involved between the policyholder and the insurance company, and as such, the maturity amount will not attract GST.

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