circular ref: IRDAI/HLT/CIR/MISC/093/04/2020 dt 16th april 20202 mentioned medical insurance for the workers to be made mandatory. it is corrcet? can we take credit on health insurance of workers. please reply
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Quick Summary
This discussion clarifies the eligibility of Input Tax Credit (ITC) for health insurance premiums paid for employees. Initially, MHA guidelines made medical insurance mandatory for workers between April 15, 2020, and May 17, 2020, allowing ITC claims. However, after May 18, 2020, these orders ceased, meaning ITC is generally blocked under Section 17(5) unless the insurance is mandatory by law for the employer.
• The guidelines issued by the Ministry of Home Affairs (MHA) Government of India vide order no. 40-3/2020-DM-I(A) dated
15.04.2020 under Sec. amongst other things specifies that all industrial and commercial establishments, work places, offices, etc. shall
be required to obtain medical insurance for the workers mandatorily before starting their operations after the lockdown. • Medical insurance would be part of the health insurance and hence ITC would be permitted only if obtaining such medical insurance is
mandatory. • However, as per MHA order dated 17.5.2020 all earlier MHA orders ceases to have effect from 18.05.2020 and there is no guideline for mandatory health insurance of workers from 18.05.2020
• Hence, the medical insurance was obligatory only from 15.4.2020 to 17.5.2020. So, ITC is only available on Premium paid for policy taken between 15.4.2020 to 17.5.2020, otherwise ITC is blocked u/s 17(5).
• The guidelines issued by the Ministry of Home Affairs (MHA) Government of India vide order no. 40-3/2020-DM-I(A) dated 15.04.2020 under Sec. amongst other things specifies that all industrial and commercial establishments, work places, offices, etc. shall be required to obtain medical insurance for the workers mandatorily before starting their operations after the lockdown.• Medical insurance would be part of the health insurance and hence ITC would be permitted only if obtaining such medical insurance is mandatory. • However, as per MHA order dated 17.5.2020 all earlier MHA orders ceases to have effect from 18.05.2020 and there is no guideline for mandatory health insurance of workers from 18.05.2020 • Hence, the medical insurance was obligatory only from 15.4.2020 to 17.5.2020. So, ITC is only available on Premium paid for policy taken between 15.4.2020 to 17.5.2020, otherwise ITC is blocked u/s 17(5).
(b) the following supply of goods or services or both—
i. food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: