GST allowed on Employee Insurance

195 views 5 replies

Nivesh tater

Tax Executive at Mazars India Bangalore

205 Points Joined February 2011

The Vampire section in GST, yes section 17(5), which restricts ITC, in a way vampire sucks blood!

Wherein, it restricts ITC on rent-a cab, life insurance and health insurance EXCEPT when;

Govt notifies the service which are obligatory for employer to provide to its employees under ANY LAW for the time being in force.

It is to be noted that under the Disaster Management Act, 2005, the Government vide it's order no 40-3/2020-DM-I(A) dated 15th April, 2020, under Annexure II mandated the employer to provide special transportation facility and Medical insurance to its employees MANDATORILY.

Under this situation the ITC could be availed. In order to ensure, do submit written representation to the Jurisdictional officer to avoid any confusion.

And most importantly do follow @ gstgist on Instagram for regular updates on GST 😁

Replies (5)

Shivam RC

Student

23688 Points Joined November 2017

Thanks for the useful update @ Nivesh Sir...
I like the name of Section 17(5) - Vampire Section...🤣🤣🤣

KRISSHNAN KP

4215 Points Joined February 2018

Useful information

vijay sai

29 Points Joined July 2020

Sir ,if the employer provides insurance to employees own car,can employer claim input tax credit on paid vehicle insurance,
pls suggest me with reference to the respective section.

Nivesh tater

Tax Executive at Mazars India Bangalore

205 Points Joined February 2011

I would reply to your query as :

Scenario 1- If car owned by Employees and car insurance service provided by employer : Since it cannot be said that it is used in the course or furtherance of business. Not eligible under 16(1) of CGST Act

Scenario 2- If car is owned by employer and car insurance services provided by employer, then also ITC is blocked under 17(5)(ab) of CGST Act.