ITC eligibility for group insurance

[RameshBabu Kari]

Dear Experts,

One of the company takes the group insurance for their employees. for the payment of premium, company deducting some portion of salary from the employees to pay the insurance premium and Insurance company will provide bill on the company name, not one the employee names. Here company collecting the premium and paying to the insurance company. Can ITC be claim on the insurance by the company as bill received on company name? What are the provisions applicable on this issue ?

[Himansu Sekhar]

As per sec 17(5) of the CGST Act

(b) the following supply of goods or services or both-

(iii) rent-a-cab, life insurance and health insurance

The credit is not eligible

[KASTURI SETHI]

I support the views of Sh.Himansu Sha, an expert.

[Himansu Sekhar]

Thank you for your support sir

[Nandan Khambete]

Under GST, ITC credit of GST paid is not available on rent-a-cab, health insurance and life insurance except the following:

1. Government makes it obligatory for employers to provide it to its employees
2. goods and/or services are taken to deliver the same category of services or as a part of a composite supply, credit will be available

So, if the insurance is taken because of obligation by the Government, Example: Insurance under Workman Compensation Act, Company can claim ITC.

Trust above clears the doubt.

Regards,

CA Nandan Khambete

[RameshBabu Kari]

Thank you all

[Himansu Sekhar]

OK

Sir

[KIRTIKUMAR PUROHIT]

if insurance is taken to fulfill Government obligation in this case ITC available on that policy other wise ITC Not available.

[Nash Industries I Pvt Ltd]

Tax paid on any service used for personal consumption is not eligible for ITC (Negative List).

If the service is used in the course of furtherance of business then ITC is allowed.

So it is important to determine whether the service is for furtherance of business or is it for personal consumption.

Regards

S.Ramaswamy

AI Summary

Input tax credit on group insurance premiums is disallowed unless a statutory employer obligation or composite supply permits it. General rule excludes input tax credit on life and health insurance premiums; ITC may be available only where the insurance is procured to meet a statutory employer obligation or where the supply forms part of a composite supply or is used to deliver the same category of taxable services; services for personal consumption remain ineligible.