Insurance customers will start parting with 16 percent tax on the money paid to them by insurers as compensation for their losses, if the proposal whose interpretation has split tax experts and insurance firms, is adopted.
The Finance Bill 2023 is proposing to introduce a new sub-section to section 17 of the Value Added Tax (VAT) Act to allow for the owner of taxable supplies who is compensated for the loss of the goods to pay 16 percent VAT.
