Health insuranc

This query is : Resolved

Rajkumar Gutti (Querist)
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26 March 2025 Our company taken employee group health insurance
Policy.
Can this health insurance policy is mandatory under Maharashtra Govt. Or any Central Govt. Law.

Is we can avail gst input credit on health insurance policy for employeeempolyee.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 March 2025 Even though it is not mandatory by any law, but being a part of employer's labour policy, many companies are providing the facility to their workers and are availing ITC over the GST paid over it.

Rajkumar Gutti

Rajkumar Gutti (Querist)
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27 March 2025 Sir,
Is there any reference, like as any court, tribunal ruling,

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 March 2025 Group health insurance policies for employees have become mandatory under certain conditions, particularly following the COVID-19 pandemic. The Indian government mandated that employers provide health insurance coverage to their employees as part of the guidelines issued by the Ministry of Home Affairs in April 2020. This requirement applies to all employers who continue business operations and includes coverage for contractual and part-time workers as well.

Post the pandemic struck, the Indian government made it mandatory for all employers to provide Mediclaim policy for employees in India. As a part of the Consolidated Revised Guidelines for resuming workplace operations by the Ministry of Home Affairs, on 15th April 2020, the Insurance Regulatory and Development Authority of India (IRDAI) released an order (No. 40-3/2020-DM-I (A)) which states that all commercial and industrial establishments, offices, workplaces, etc. shall follow a Standard Operating Procedure (SOP).

The aforesaid SOP had insisted business organizations to take medical insurance compulsorily for its workers. Circular to the same effect was issued by IRDAI on 16th April 2020 wherein the regulator recommends insurers to offer comprehensive health insurance policies at an affordable cost for the organizations.

Details:: https://www.taxsutra.com/gst/experts-corner/ray-hope-eligibility-freedom-itc-group-health-insurance-policy

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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29 March 2025 Under GST Law (Section 17(5) of CGST Act, 2017), input tax credit (ITC) on health insurance for employees is generally blocked, meaning not allowed.

However, there is an exception:

✔️ If providing such insurance is mandated by law, such as under the Factories Act, Shops and Establishments Act, or any other applicable law, then ITC on health insurance premium paid for employees can be claimed.

So, if your company is taking the group health insurance policy as a statutory obligation, you are eligible to take the ITC.

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