ITC Eligibility on Staff's Medical Insurance

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This query is : Resolved

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This discussion explores whether a company can claim Input Tax Credit (ITC) on medical insurance provided to its employees. While some believe ITC is claimable, the prevailing view, referencing Section 17(5)(b) of the GST Act and CBIC clarifications, suggests ITC is generally not available unless the insurance is a statutory or obligatory requirement for the employer. The applicability of the proviso to clause (iii) is key to determining eligibility.

SUDHEEP M

SUDHEEP M (Querist)
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19 March 2024 Sir,

My company was a traders of building material and providing health insurance to all employees working in the organization a part of corporate policy. But there is no statutory requirement to compulsorily provide insurance to the employees. Policy was taken from star health insurance and invoice was raised in the name of the company with GST invoices. Whether, my company can avail ITC in respect of the staff's insurance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 March 2024 ITC can't be claimed on staff medical insurance.

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RAJA P M

RAJA P M (Expert)
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19 March 2024 Yes, You can claim ITC for that Medical Insurance which is taken for Employees. Ni issues.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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20 March 2024 No, ITC cannot be taken under section 17(5)(b) clause iii read with proviso. on health insurance it can b taken only if it was obligatory for the employer to provide such insurance to the employees. Clarification issued by CBIC states that proviso after clause iii shall be applicable to the whole of clause b of section 17(5).

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RAJA P M

RAJA P M (Expert)
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20 March 2024 Yes, That (query) insurance given by employer to employees. Then ITC is available for insurance.

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