GST ITC on health insurance

Originally posted by : rajan kumar
	Can a company take gst input credit on premium paid for health insurance of employees?

Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following namely: 

(b) the following supply of goods or services or both, -
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre,
(iii) rent-a-cab, life insurance, health insurance except where

(A) the Government notifies the services which are obligatory for anemployer to provide to its employees under any law for the time being in force; or
 

(B) such inward supply of goods or services or both of a category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or home travel concession.

***Under GST, ITC credit of GST paid is not available on rent-a-cab, health insurance and life insurance except the following:

1. Government makes it obligatory for employers to provide it to its employees
2. goods and/or services are taken to deliver the same category of services or as a part of a composite supply, credit will be available

So, if the insurance is taken because of obligation by the Government, Example: Insurance under Workman Compensation Act, Company can claim ITC.

Trust above clears the doubt.

If it's wrong then Explain Yourself for the Difference of the above Point...

Life and health insurees will not have ITC as it is not available for life and health insurances (as they are for personal purposes).

Exceptions for ITC is available :- as per PM Raja Sir notes. 

Insurance is provided to th employees for their services to the organisation (It is a component of CTC). Employee services are not Supply. Hence any cost incurred on staff which form parts of contractual obligation is not covered under GST. Hence Input on health insurance cannot be taken