16 December 2010
When I was reading the "Service Tax Ready Reckoner", it was mentioned in that is " There is also ample case law that invoice need not be in name of service provider (i.e., . WE"
Can anyone help in this regard? with case law please.
17 December 2010
The Author of the Ready reckoner is V S Datey. For your ease of referance it is given in Page no. 105. and it is 15th edition.
About the query:
One of our client is a insurance company, they receive invioce from Third Party Administrator (TPA) all mediclaim payments. usually the Bill raised by hospitals will be in the name of TPA. And Insurance co. will discharge the payment. They are losing Service Tax portion since Bill is not in their name. For this I wanted the clarification and case law if any.
19 July 2024
In the scenario where an insurance company makes payments to hospitals for mediclaim settlements, but the invoices are raised in the name of a Third Party Administrator (TPA), the issue typically revolves around the availability of service tax credit (now GST credit) on such payments.
Here are the key points to consider:
1. **Invoice and Service Tax Credit:** - Under the GST regime, to claim input tax credit (ITC), the recipient of goods or services must possess a valid tax invoice issued by the supplier in their name. If the invoice is in the name of TPA, the insurance company may face challenges in claiming ITC for the service tax (GST) paid on these payments. - The tax invoice is a critical document that establishes the right to claim credit. Since the invoices are not in the insurance company's name, they may not be able to claim credit for the GST paid on these invoices.
2. **Legal and Practical Considerations:** - **Case Law and Precedents:** It's important to note that specific case laws or precedents directly addressing this issue may vary by jurisdiction and specific circumstances. Generally, the courts and tax authorities uphold the requirement that the tax invoice must be issued in the name of the entity claiming the credit. - **Clarifications and Circulars:** Sometimes, tax authorities issue clarifications or circulars providing guidance on such issues. Checking with the local GST authority or seeking professional advice from a tax consultant or lawyer familiar with GST laws in your jurisdiction could provide more clarity.
3. **Potential Solutions:** - **Contractual Arrangements:** The insurance company could explore options to ensure that hospitals issue invoices directly in their name instead of TPA. This may involve renegotiating contracts with TPAs or clarifying arrangements with hospitals. - **GST Credit Reconciliation:** If the insurance company is unable to obtain invoices in their name, they may consider alternative methods to reconcile GST credits, such as adjusting input credits based on agreements or negotiations with the tax authorities.
4. **Consultation and Compliance:** - Given the complexities involved, it's advisable for the insurance company to seek professional advice from a tax consultant or lawyer specializing in GST. They can provide guidance on the specific legal requirements, potential risks, and strategies to optimize GST credits in compliance with applicable laws.
In summary, while there may not be a specific case law directly addressing the exact scenario described, adherence to GST laws and regulations regarding invoice issuance and credit eligibility is crucial. Consulting with a tax expert will be beneficial in navigating this issue effectively.
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