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ITC in Health insurance

17 July 2020

circular ref: IRDAI/HLT/CIR/MISC/093/04/2020 dt 16th april 20202 mentioned medical insurance for the workers to be made mandatory. it is corrcet? can we take credit on health insurance of workers. please reply

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8 Replies

KRISSHNAN KP (4215 Points)
Replied 17 July 2020

ITC is not available

2 Like

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 17 July 2020

@ Mr Savita Deshpande.,

Yes... You can avail Credit for the insurance which paid for employees by company.

1 Like

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 17 July 2020

• The guidelines issued by the Ministry of Home Affairs (MHA) Government of India vide order no. 40-3/2020-DM-I(A) dated 15.04.2020 under Sec. amongst other things specifies that all industrial and commercial establishments, work places, offices, etc. shall be required to obtain medical insurance for the workers mandatorily before starting their operations after the lockdown.
• Medical insurance would be part of the health insurance and hence ITC would be permitted only if obtaining such medical insurance is mandatory. • However, as per MHA order dated 17.5.2020 all earlier MHA orders ceases to have effect from 18.05.2020 and there is no guideline for mandatory health insurance of workers from 18.05.2020
• Hence, the medical insurance was obligatory only from 15.4.2020 to 17.5.2020. So, ITC is only available on Premium paid for policy taken between 15.4.2020 to 17.5.2020, otherwise ITC is blocked u/s 17(5).

1 Like

savita deshpande (59 Points)
Replied 17 July 2020

Thank you to all

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 17 July 2020

Originally posted by : Sagar
	• The guidelines issued by the Ministry of Home Affairs (MHA) Government of India vide order no. 40-3/2020-DM-I(A) dated 15.04.2020 under Sec. amongst other things specifies that all industrial and commercial establishments, work places, offices, etc. shall be required to obtain medical insurance for the workers mandatorily before starting their operations after the lockdown.• Medical insurance would be part of the health insurance and hence ITC would be permitted only if obtaining such medical insurance is mandatory. • However, as per MHA order dated 17.5.2020 all earlier MHA orders ceases to have effect from 18.05.2020 and there is no guideline for mandatory health insurance of workers from 18.05.2020 • Hence, the medical insurance was obligatory only from 15.4.2020 to 17.5.2020. So, ITC is only available on Premium paid for policy taken between 15.4.2020 to 17.5.2020, otherwise ITC is blocked u/s 17(5).

It's not blocked u/s 17(5)....

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 17 July 2020

@ Raja P M .,
Pls refer Sec 17(5) of CGST act.

Relevant extract of the section is as under:

(b) the following supply of goods or services or both—

i. food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 17 July 2020

@ Mr Sagar.,

(aa).....
applicable to self ...

Not for employees as company expenses...

Note : Better to write prefix Mr / Ms / Mrs any naming word if You'll write...