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GST ITC on health insurance

rajan kumar (5 Points)

28 June 2018

Can a company take gst input credit on premium paid for health insurance of employees?

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11 Replies

Ravi SADhiyan (Practice) (4510 Points)
Replied 28 June 2018

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.

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Jatin (Accountant) (3479 Points)
Replied 28 June 2018

No, you can't take ITC on premium paid on Health Insurance

CA Ankit R Momaya (Partner at Bhat Momaya & Associates) (2319 Points)
Replied 28 June 2018

No it's a blocked credit. Hence ITC is not available

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 28 June 2018

Why not the ITC not available...?

Please explain Dear All....

Vinod Babu (24196 Points)
Replied 28 June 2018

Expenses relating to rent-a-cab facilities, life or health insurance can be claimed as input tax credit only when the Government notifies it as services which are obligatory for an employer to provide to its employees under law. Else, to claim input tax credit, the inward supply must have been used for making an outward taxable supply of the same category or as part of a taxable mixed supply.

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RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 28 June 2018

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

Government makes it obligatory for employers to provide it to its employees
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...

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 28 June 2018

Yes ,.. fully agree with Mr. Raja ji, that if the Govt makes it obligatory on Employer then the ITC can be claim , else cant claim

Vinod Babu (24196 Points)
Replied 28 June 2018

Yes, you are right sir.......

Rammi_RP Rawat (Accountant ) (386 Points)
Replied 29 June 2018

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.

Sai Ram Vobilisetty (CA) (6 Points)
Replied 04 July 2018

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