GST Status of Insurance Premium Collections Collected by Agents
The Karnataka GST authority dismissed this advance ruling application after the applicant withdrew it, leaving the main tax question unanswered.
- Ruling
- KAR ADRG 08 / 2018 Dated: 23rd April, 2018
- Dated
- 23 Apr 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The GST authority dismissed the application because the company withdrew it.
- No legal ruling or decision was made on the merits of the case.
- The company asked if collecting insurance premiums as an agent attracts GST.
- This order provides no precedent for other businesses collecting premiums.
In short
Manipal Academy for Higher Education asked the Karnataka Goods and Services Tax (GST) authority whether collecting insurance premiums from the public as a collecting agent attracts GST. They were collecting these premiums under a healthcare scheme to pass on to insurance companies. However, before the authority gave a ruling, the company submitted a letter on 19.02.2018 asking to withdraw their request.
What has changed
How it worked before
Businesses collecting insurance premiums on behalf of insurers were unclear whether GST applied to the entire collected amount or if acting merely as a collecting agent kept them outside the tax net.
What has changed
Nothing changed regarding tax rules because the authority did not issue a decision on the merits. The Karnataka authority granted permission to withdraw the application under Order 08 dated 23-04-2018. As a result, this order does not settle whether collecting insurance premiums as an agent attracts GST.
Who this affects
Educational institutions, non-profits, healthcare organizations, or businesses that collect insurance premiums from the public on behalf of insurance companies.
An example
A trust runs a health awareness program and collects ₹1,000 as an insurance premium from individuals to hand over to a registered insurance company. The trust wants to know if it must charge GST on this collected money since it is only acting as a intermediary agent. Looking at this ruling (Order 08 dated 23-04-2018), the trust finds no guidance because the case was withdrawn before any tax decision was made. The trust must consult its tax advisor instead of following this order.
What you should do
Do not rely on this document to determine your GST obligations. An advance ruling only binds the business that asked and its specific tax officer, and in this case, no ruling was delivered at all. If you operate as a collecting agent, consult a tax advisor or apply for your own advance ruling.
If you do nothing
Assuming this case gives you an exemption or tax relief is a mistake because no decision was made. If a tax officer audits your collections, citing this withdrawn order will not protect your business. You risk paying back taxes, interest, and penalties if your tax treatment is incorrect.
The terms explained
- Advance Ruling
- An official tax decision given by authorities to a specific business clarifying how tax laws apply to their proposed transaction.
- Collecting Agent
- A person or business that collects payments from customers on behalf of another entity to pass those funds along.
- Goods and Services Tax (GST)
- A national tax in India added to the supply of most goods and services.
The ruling in detail
Authority for Advance Ruling
M/s MANIPAL ACADEMY FOR HIGHER EDUCATION
KAR ADRG 08 / 2018 Dated: 23rd April, 2018 · Karnataka
Questions before the authority
- Whether collections made by the applicant under Manipal Arogya Suraksha Scheme from public on behalf of the insurance companies are liable to levy of tax considering the fact that the same are made merely as a collecting agent and the applicant is not engaged in provision of services ?
Facts
The applicant provides educational and healthcare services and introduced the Manipal Arogya Suraksha Scheme in association with Trusts and NGOs to provide concessional healthcare benefits. Under the scheme, members of the public are insured by insurance companies, and the applicant collects insurance premiums from beneficiaries to pass on to the insurers. The applicant sought an advance ruling on whether collecting these premiums as an agent attracts GST.
Ruling
The application for advance ruling was **dismissed as withdrawn** following the applicant's formal request to withdraw the matter. The Authority did not render any decision on the merits of the question.
Reasoning
During the proceedings, the applicant submitted a letter dated 19.02.2018 informing the Authority of its intention to withdraw the application. The Authority considered the written request and granted permission to withdraw the application in accordance with the provisions under Section 98 of the CGST Act, 2017 and KGST Act, 2017.
Provisions relied on
- Section 97, CGST Act, 2017
- Section 98(4), CGST Act, 2017
- Section 98(4), KGST Act, 2017
- Rule 104, CGST Rules, 2017
- Rule 104, KGST Rules, 2017
For the practitioner
This order is a **procedural dismissal as withdrawn** and contains no legal precedent or substantive ruling. It does not settle the taxability of insurance premium collections made by facilitating entities or collecting agents.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/08-manipal_academy-2-aar-order.pdf
Legibility of the scan, as read: high.
Prepared 17-10-2026.
About Patron Accounting LLP
Patron Accounting LLP is a CA and CS-led accounting and compliance firm that has been working with businesses across India since 2019. We handle the work that keeps a company correct with every department it answers to: day-to-day bookkeeping and accounting, GST registration and returns, income tax filing and assessments, TDS, payroll and PF/ESI, company and LLP incorporation, ROC and MCA compliance, statutory and internal audit, physical stock and inventory audits, trademark and other registrations, and the certificates and reports that banks, buyers and regulators ask for.
Our clients range from a first proprietorship registering for GST to established companies running operations across several states. Much of our work is exactly this: reading what a department has published and telling a business, in plain terms, whether it changes anything for them.
We operate from five offices and serve clients across the rest of India remotely:
- Pune (HQ): RTC Silver, B4-708, Sai Satyam Park, Wagholi, Pune, Maharashtra 412207
- Mumbai: 104, Rajshila Building, 597 J.S.S. Road, Marine Lines, Mumbai 400002
- Delhi: 3rd Floor, B-6/154-155, Sector 5, Rohini, Delhi 110085
- Gurugram: Pioneer Urban Square, B109, Golf Course Ext Road, Sector 62, Gurugram 122098
- Ahmedabad: Phoenix Tower, 1107, near Commerce Six Road, Drive In Road, Navrangpura, Ahmedabad, Gujarat 380009
If anything on this page affects you and you would like somebody to look at your own position, we are glad to help. Call +91 94594 56700, write to sales@patronaccounting.com, or visit patronaccounting.com. The first conversation costs nothing.