ITC on medical insurance allowable under GST ?

[Jasbir Uppal]

Dear professionals,

My query is as per the order issued by Ministry of Home Affairs(MHA) MHA has issued Order No. 40-3/2020-DM-I (A) dated 15th April, 2020. In Clause No. 5 of Annexure II of the order MHA has made medical insurance mandatory for workers. Further MHA has issued clarification via ref: IRDAI/HLT/CIR/MISC/093/04/2020 dated 16th April, 2020. In the said reference the Government has stipulated all industrial and commercial establishments, work places, offices etc. shall made arrangements for implementation of Standard Operating Procedure (SOP) before starting their functioning.

Now, as per Section 17 (5) (a) of CGST Act, 2017 clearly states that the taxpayer is eligible to avail input tax credit if Government has made any service obligatory for an employer. Can we claim ITC on medical insurance paid as per aforementioned order.

Thanks & Regards

J S Uppal

AI Summary

Eligibility of Input Tax Credit on Medical Insurance for Workers Under GST Scrutinized; Section 17(5) of CGST Act Referenced A query was raised regarding the eligibility to claim Input Tax Credit (ITC) on medical insurance under the Goods and Services Tax (GST) framework, following a Ministry of Home Affairs (MHA) order mandating medical insurance for workers. Responses highlighted that under Section 17(5) of the CGST Act, ITC is available if the service is obligatory under any law. However, the MHA order, issued under the Disaster Management Act, may not be treated as an Act of Parliament, raising questions about ITC eligibility. Clarification from authorities was suggested for assurance. The term 'workers' was clarified to refer to manual laborers, not top management.