ITC under GST on Health Insurance for Employees due to COVID19 Divya Rathi, dated 26 June, 2020

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The Tax Publishers GST--Input Tax Credit ITC under GST on Health Insurance for Employees due to COVID-19 Divya Rathi In this article the learned author seeks to analyse the eligibility of Input Tax Credit ('ITC') of GST paid on medical insurance premium on policies taken as per order dated 15-4-2020 issued by the Ministry of Home Affairs. 1. Preliminary Recently, the Ministry of Home Affairs (MHA) vide Order No. 40-3/2020- DM-I(A) dated April 15, 2020, has issued mandatory guidelines under the Disaster Management Act, 2005 for operating businesses during the COVID-19 pandemic. As per these guidelines it is mandatory to take medical insurance for workers at offices, workplace, factories, etc. Hence, all industrial and commercial establishments, workplaces, offices etc. shall be under statutory obligation to obtain medical insurance for their workers for the implementation of Standard Operating Procedure (SOP) before starting their functioning. In line of these guidelines, IRDAI has issued instructions to all health insurance companies vide their letter no. Ref: IRDAI/HLT/CIR/MISC/093/04/2020 dated April 16, 2020 (Letter) whereby it has been said that all General and Health Insurance companies may offer comprehensive health insurance policies either to individuals or groups in order to enable the listed organisations / employers / establishments comply with the above referred directions. Notably, the MHA has withdrawn the said order vide order dated May 17, 2020. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Input Tax Credit

ITC under GST on Health Insurance for Employees due to COVID-19

Divya Rathi

In this article the learned author seeks to analyse the eligibility of Input Tax Credit ('ITC') of GST paid on medical insurance premium on policies taken as per order dated 15-4-2020 issued by the Ministry of Home Affairs.

1. Preliminary

Recently, the Ministry of Home Affairs (MHA) vide Order No. 40-3/2020- DM-I(A) dated April 15, 2020, has issued mandatory guidelines under the Disaster Management Act, 2005 for operating businesses during the COVID-19 pandemic. As per these guidelines it is mandatory to take medical insurance for workers at offices, workplace, factories, etc.

Hence, all industrial and commercial establishments, workplaces, offices etc. shall be under statutory obligation to obtain medical insurance for their workers for the implementation of Standard Operating Procedure (SOP) before starting their functioning. In line of these guidelines, IRDAI has issued instructions to all health insurance companies vide their letter no. Ref: IRDAI/HLT/CIR/MISC/093/04/2020 dated April 16, 2020 (Letter) whereby it has been said that all General and Health Insurance companies may offer comprehensive health insurance policies either to individuals or groups in order to enable the listed organisations / employers / establishments comply with the above referred directions. Notably, the MHA has withdrawn the said order vide order dated May 17, 2020.