By Yogesh Verma (CS/LLB) / 2 min read / GST Case Law
Case Details: AXA France
Vie-India Vs. Union of India & Ors.
Case No.: W.P.(C)
4136/2024
Date of Order: October
1, 2024
Name of Court: High
Court of Delhi, New Delhi
Coram: Hon'ble
Mr. Justice Yashwant Varma / Hon'ble Mr. Justice Ravinder Dudeja
Summary of Case: The petitioner, AXA France Vie-India, sought relief
regarding the applicability of certain GST exemptions on reinsurance services
provided for government-sponsored insurance schemes. The issue revolved around
whether an exemption notification was curative and applied retrospectively,
thus exempting reinsurance services from GST for a specific period prior to the
formal notification.
Facts of the Case:
·
AXA France Vie-India, a
multinational insurance company, was involved in providing reinsurance services
under government insurance schemes in Rajasthan and Maharashtra.
·
These schemes were under the
“Bhamashah Swasthya Bima Yojna” and “Rajiv Gandhi Jeevandayee Arogya
Yojna/Mahatma Jyotibha Phule Jan Arogya Yojna.”
·
A notification issued on January 25,
2018, introduced an exemption for reinsurance services for these schemes, but
the petitioner argued that this exemption should apply retrospectively from
July 1, 2017.
·
On December 20, 2023, an impugned
order demanded GST payments for the period from July 1, 2017, to July 25, 2018,
which the petitioner contested.
Submission by Petitioner:
·
The petitioner contended that the
notification issued on January 25, 2018, which exempted reinsurance services
for government schemes, was clarificatory in nature and should apply
retrospectively from July 1, 2017.
·
The petitioner also challenged the
demand order dated December 20, 2023, issued by the authorities, claiming it
was contrary to the exemption provisions and was barred by limitation.
·
Furthermore, the petitioner
submitted that the authorities failed to recognize the correct legal position
and requested the court to quash the demand.
Submission by Respondent:
·
The respondents represented by the
Union of India defended the demand, asserting that the exemption could not be
applied retrospectively and was only applicable from January 25, 2018.
·
They relied on the lack of
clarifications or retrospective application of the notification at the time of
the demand issuance.
Findings and Judgement of Court:
·
The court observed that an error had
occurred in the interpretation of the exemption provisions, particularly in the
omission of Serial No. 40 in the notification dated June 28, 2017.
·
The subsequent notification dated
July 26, 2018, corrected this error by including Serial No. 40, which referred
to the exemption for reinsurance services under government-sponsored insurance
schemes.
·
The GST Council, in its meeting held
on June 22, 2024, had clarified that the exemption should be regularized for
the period between July 1, 2017, and July 26, 2018.
·
The court concluded that the demand
order dated December 20, 2023, could not stand in light of the clarifications
provided by the GST Council and the subsequent circular issued by the Ministry
of Finance.
Conclusion: The court allowed the writ petition and quashed the impugned
order dated December 20, 2023. The
petitioner, AXA France Vie-India, was granted all consequential reliefs, and
the GST demand was declared invalid for the relevant period.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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