Collection of Premium and GST amount from Employees for Insurance Top up

[Sameer Annigeri]

Company collects Insurance premium amount and GST from employees for TOP UP of the existing Insurance and the same amount will be paid to the insurance company. Following is the example.

Premium amount is 100 and 18 GST is collected from Employees. Total 118 rupees will be paid the insurance company.  Insurance company is issuing invoice with applicable GST @ 18%.

In this case whether company has to pay the GST amount18 rupees to the department which is collected from employee. 

Kindly check and provide the details

AI Summary

Pure agent treatment for insurance premiums: employer must deposit GST if it is shown or collected separately.
Where an employer pays insurance premiums on behalf of employees and simply recovers the exact amounts, the employer functions as a pure agent and no additional GST arises so long as no margin is retained. However, if the employer separately shows or collects GST from employees, that GST must be deposited with the government; to maintain pure agent status recoveries should be on a cost to cost basis without separate GST collection or retained commission.