26 November 2013
I am working in manufacturing company we have taken two insurance policy for cash & Employee can we take service tax credit on above subject.
26 November 2013
Sir Cenvat credit of insurance policy of employees is not admissible as the same is excluded from defination of input service of Rule2(1) of thr Finance Act 2011. Whereas the insurance premium paid for cash is related to business and the service tax credit on same can be availed.
26 November 2013
To add on i would like to say if there ia an obligation on your manufacturing concern under Workmen Compensation Act to obtain insurance of employees then the same is admissible. For your reference read the case law below: CCE&ST, LTU, Bangalore vs. Micro Labs Ltd. 2012 (26) STR 383 (Kar.)
The assessee in this case manufacture of medicaments, claimed cenvat credit of service tax paid on Group medical policy and Group insurance health policy. The Court observed that, obligation has been cast on manufacturer under Workmen’s Compensation Act to obtain insurance policy. Therefore, it is held that, policy taken by assessee is a service constituting, activity relating to business which is covered under input service definition and service tax paid on all services utilized directly or indirectly in or in relation to final product eligible as credit.
CAclubindia
