Input on premium employees group insurance

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This query is : Resolved

Quick Summary

This discussion addresses whether GST paid on employee group insurance, provided as part of CTC and appointment orders, can be claimed as input tax credit. While it's a business-related employee benefit, the GST law, specifically Section 17(5) of the CGST Act, generally disallows ITC on health insurance for employees. Despite arguments about it being an obligatory employer expense, the consensus is that the law currently prevents claiming this ITC.

R.KANDASUBRAMANIAN

R.KANDASUBRAMANIAN (Querist)

13 May 2025 We paid premium on employees group insurance and claimed as input in 3b for FY 2021-22
Is it allowed since given in appointment order this insurance benefit is given and is included in CTC. GST notice received disallowing this. How to reply

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 May 2025 Under the GST Law, input tax credit (ITC) of GST paid on health insurance service taken for employees is not available as provided in Section 17(5) of the Central Goods and Services Tax Act, 2017.

R.KANDASUBRAMANIAN

R.KANDASUBRAMANIAN (Querist)

13 May 2025 Sir thanks for the reply. But the entity does not have ESI benefit for employees and as such provided this benefit. As such it is obligatory on employer part. Kindly inform your opinion sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 May 2025 I agree with you, it's for employees benefit related to business ITC can be claimed but GST Act specific about ITC claim not available hence we can't do anything.

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