Medical Insurance premium for employees, pensioners and their family members are taxable under GST

Last updated: 26 November 2022

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Quick Summary

The Telangana State Appellate Authority for Advance Ruling has ruled that GST is applicable on medical insurance premiums paid for employees, pensioners, and their family members. The authority determined that these insurance services are not directly related to the core functions of a municipality as outlined in Article 243W of the Constitution. While vehicle insurance premiums for vehicles used in essential municipal functions may be exempt, general employee medical insurance is considered taxable.

Court :
Telangana State Appellate Authority for Advance Ruling

Brief :
The Telangana State Appellate Authority for Advance Ruling ("TAAAR") in the case of M/s. Hyderabad Metropolitan Water Supply and Sewerage Board (Order in Appeal No. AAAR/12/2022) upheld the ruling passed by Advance Ruling Authority ("the AAR") of not providing the benefit of exemption under entry no. 3 of the Notification 12/2017-Central Tax (Rate) dated June 28, 2017 ("Exemption Notification") wherein the payment was made for medical insurance premium for employees, pensioners, and their family members.

Citation :
Order in Appeal No. AAAR/12/2022

Daily Limit Reached