GST on purchase of annuity thru IT recognized Trust Fund

Jayanta Bandyopadhyay (106 Points)

26 January 2022  

Employer Co has set up IT recognized Trust Fund to manage superannuation funds, where contribution defined amount lying to the credit of respective employee account in Corpus, is utilized to buy annuity from LIC on retirement. Policy is bought in the name of Master Policy holder with sub account  in employee name.

However, 2% GST is deducted from purchase price.Thus pension value gets reduced.

My query..Fund is duly recognized under Incone Tax Act and its income is tax exempt. Then ad to why during disbursement time, member is sub to GST.

Kindly guide.