GST credit on group gratuity scheme

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When considering a group gratuity scheme that includes life cover, it's important to note that GST on the life insurance portion is generally not claimable as it falls under blocked credits according to Section 17(5)(b) of the CGST Act 2017. However, you may be able to claim GST credit on the gratuity component of the scheme. It is advisable to obtain a clear bifurcation from your service provider to distinguish between the two.

GURLEEN KAUR

GURLEEN KAUR (Querist)
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17 November 2020 can i avail GST credit on group gratuity scheme in case of a company. scheme covers risk for life cover and gratuity?

Guest

Guest (Expert)

17 November 2020 Here, GST applies on life insurance cover, which is not allowed to be claimed.

CMA Bhavya

CMA Bhavya (Expert)
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17 November 2020 Dear Sir/Madam,
Section 17(5)(b) of CGST Act 2017 ...
(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;

its listed in blocked credit so you cannot avail the ITC on life insurance.

regards,
Bhavya.P