Insurance companies don't pay GST on salvage if it's insured's property. But if it's insurer's property, GST is due on sale.
Circulars
GST
The Circular addresses the taxability of salvage/wreck value in motor vehicle insurance claims under GST law. Insurance companies are not liable to pay GST on salvage deducted from claim settlements if such salvage remains the property of the insured. However, if the insurance contract settles the claim without deducting salvage value, making salvage
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