CENVAT credit on group insurance premium upheld in full where no extra premium was charged for dependent family cover.

CENVAT credit on service tax paid for group insurance can be available as an input service, but where additional premium is charged for coverage of employees' dependent family members, credit may be confined to the employee-related portion. On the facts, the assessee produced evidence that no extra premium was collected for extending the policy to dependants, so there was no basis to apportion the credit. Full CENVAT credit on the group insurance premium was therefore admissible.

---

---

Issues: Whether CENVAT credit on service tax paid towards a group insurance policy covering employees and their dependent family members is admissible in full or is to be restricted to the portion relatable to the employee alone.

Analysis: The appeal concerned denial of credit to the extent the policy also covered family members. The Tribunal noted the consistent view that insurance service could qualify as an input service, but where separate premium is charged for extending cover to family members, credit may be confined to the employee-related portion. On the facts, the appellant produced additional evidence showing that no extra premium had been collected for extending the benefit to dependent family members. That factual position removed the basis for restricting the credit. The Tribunal therefore accepted that the entire service tax paid on the group insurance premium was attributable to the insured employee cover and was eligible as CENVAT credit.

Conclusion: The restriction of credit was unsustainable and full CENVAT credit on the group insurance premium was admissible to the assessee.

---