GST Input on Medical Insurance Expense (Employess.)

[Guest]

Dear Expert(s),

A Group Insurance taken by the Company of all their workers AND ALSO RECOVERED THE COST OF SUCH EXPENSE FROM THEIR WORKERS.

The bill is in the name of the company, so whether the GST Input allowed to the company as it is written in the LAW:

No Input shall be allowed for rent-a-cab, health insurance and life insurance except the following:

1. Government makes it obligatory for employers to provide it to its employees (Workmen Compensation Act.)

[Nitika Aggarwal]

Dear Sir,

Input tax credit of GST charged on health insurance has been specifically barred in the law via section 17(5)(b)(iii) of CGST Act, 2017. However the government has carved some EXCEPTION to the aforesaid provision in similar section only, which reads as under:-

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

(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply;

Thus, in your case, if it has been mandatorily notified by the government, then only the company is eligible to take the credit of same, otherwise not.

Regards

Nitika Aggarwal

9953157961

[Guest]

Dear Mam,

Thanks for your valuable reply and concern.

But as per the fact of the case, we are under obligation to comply with the Workmen's Compensation Act, 1923 and accordingly taking the group insurance of all the workers.

The point is we are deducting the amount of such claim from their wages and salaries of our workers.

Now is the input of GST allowed to us we are debited the expense on one side and made the recovery on the other side.

-

Best Regards,

Shubham Dua

Cell: +91-8826406987

+91-9958033578

[YAGAY andSUN]

.There is specific denial in the GST Law about availment of ITC on such services. However, you may get it clarified from the Department by way of filing/Seeking Advance Ruling

[KASTURI SETHI]

Drar Querist, .Note the word, "NOTIFIED". Hence rightly advised by M/s. YAGAY and SUN, Sirs. Not litigation free without specific notification.

AI Summary

Input tax credit denial for employee health insurance persists absent government notification permitting ITC, despite employer recovery from employees. ITC on GST charged for employer procured employee health insurance is generally disallowed, with exceptions only where the government notifies the service as an employer obligation or where the inward supply is used to make an outward taxable supply of the same category; mere recovery of the premium from employees does not permit ITC, and an advance ruling or departmental clarification is advisable to determine if the Workmen Compensation obligation has been so notified.