The Telangana Appellate Authority for Advance Ruling (AAAR), on the medical insurance taken to furnish health insurance to employees, pensioners, and their family members carried that no exemption in GST is there.
The bench, Neetu Prasad and BV Siva Naga Kumari have found that the insurance services for employees and their family members obtained via the appellant (HMWSSB) are not in direct and proximate reference to the water supply and sewerage-related functions, entrusted under Article 243W of the Constitution of India.
The bench closed with that the supplies obtained via the petitioner would not get a GST exemption.
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The Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) paid, medical insurance premiums that are carried to furnish health insurance to the employees, pensioners, and their family members, and the vehicle insurance policies would be carried for furnishing the insurance to the vehicles which the board owned.
The petitioner specified, they are being exempted from paying GST in view of Entry No. 3 of notification number 12/2017, Central Tax (Rate), June 28, 2017.
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In the notification, it specified that for the pure services furnished to the central government, state government, union territory local authority, or government authority in concern to any function entrusted to the panchayat or in concern to any operation entrusted to the municipality, the GST rate would be zero.
The board seeks an advance for the issues of whether medical insurance premiums opted to furnish health insurance to the employees, pensioners, and their family members, who were qualified for exemption.
AAAR emphasis, Goods and Service Tax exemption would be subjected to be applied when the vehicles would be used to furnish the services beneath schedule XII of the constitutions excluding the case in which the services would be used for the transportation of the employees, board members, or other persons with no direct relationship to functions discharged under Article 243W.
The HMWSSB questioning the order of AAAR argued that the supply of services is qualified for GST exemption as the board was created in 1989, under the provisions of the Hyderabad Metropolitan Water Supply and Sewerage Act 1989, with various functions and responsibilities in the Hyderabad Metropolitan Area.
