GST credit on Medical and Accidental insurance

[CABIJENDERKUMAR BANSAL]

Dear respected members,

Greetings!

This is hereby to seek your valuable opinion on query- " Whether GST credit is allowed on Medical Insurance of Staff including some blue collar employees who are not covered in ESI'

Please consider following facts ;-

1) "as per proviso was added to clause (b) to Sec 17(5) - "

Provided that the input tax credit in respect of such goods or services

or both shall be available, where it is obligatory for an employer to provide

the same to its employees under any law for the time being in force.”

2) 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.

Issues :-- 1) whether Employees cover under meaning of workers!

2) whether we can take MHA order as LAW for the time being in force! Or any other law is theer who makes the Medical insurance mandatory !

Thanks in aticipation of opinions !

M. 9999124788

AI Summary

Input tax credit on employee medical insurance hinges on an employer's legal obligation created by disaster management orders.
Input tax credit for employer provided medical and accidental insurance is available only if there exists a legal obligation making such provision mandatory for employers. The proviso restores credit where it is obligatory under any law for the time being in force. The MHA issued disaster management orders requiring medical insurance for workers; key questions are whether those orders cover employees/staff broadly and whether such orders constitute a qualifying legal obligation for ITC under the proviso.