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GST Council Allows Employers to Claim Input Tax Credit on Health and Life Insurance Premiums

GST Council Allowed Employers to Claim ITC on Group Insurance Coverage

Finance Minister Nirmala Sitharaman addressed the 57th GST Council meeting with state ministers and others and allowed employers to get ITC on GST paid for employee insurance cover.

At present, an 18% GST is imposed on all these group insurance policies.

Under the Goods and Services Tax (GST) law, individuals purchasing life or health insurance policies for themselves or their families are exempt from GST.

However, when a business purchases life or health cover for its employees, the cover attracts tax, and till then, the business cannot claim input tax credit (ITC) on it.

Employers can provide the insurance to employees because of its low cost.

Almost every organised employer provides coverage to their employees, thereby reducing the cost of providing such coverage; this should help expand coverage and benefit the insurance industry itself.

A committee of officers will be set up for the ITC claims; they will analyse how to safeguard a genuine buyer who has an accurate invoice, has received the goods, and has paid his supplier.

Read Also: How NRI Can Get GST Refund on Health Insurance Policies

The ministry stated that the committee of officials will complete its study within three months, and an agenda will be presented at the next council meeting.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
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