Nirmala Sitharaman,Union Finance Minister
Currently, an 18 per cent GST is levied on all such group insurance policies.
Almost every organised employer provides cover for its workforce, so the cost of providing the coverage comes down, which should assist the spread of cover and the insurance industry itself, sources added.
New Delhi:The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers on Thursday has allowed employers to get Input Tax Credit on GST paid for employee insurance cover.
Currently, an 18 per cent GST is levied on all such group insurance policies.
Under the Goods and Services Tax law, GST is exempt on individuals buying life or health policies for themselves or their family.
However, when a business buys life or health cover for its employees, tax is charged on that cover, and until now the business could not claim ITC on it.
“This will make insurance cheaper for every employer to provide”, industry sources said.
Almost every organised employer provides cover for its workforce, so the cost of providing the coverage comes down, which should assist the spread of cover and the insurance industry itself, sources added.
The GST Council on Thursday approved scrapping the arrest powers of GST officers and raised the threshold to launch prosecution to Rs 5 crore from Rs 1 crore.
“The rate structure is settled, so the council has turned to how the tax works day to day,” the Finance Ministry said, adding that GST rate changes will now happen once a year.
On input tax credit claims, 57th GST Council decided to set up a Committee of Officers to examine how to protect a genuine buyer who holds a proper invoice, has received the goods, and has paid his supplier in full.
“The Committee of Officers will complete its study within three months, and an agenda will be placed before the next council meeting,” the ministry said.
The GST Council revoked GST officers’ arrest powers.
The threshold for prosecution goes up from Rs 1 crore to Rs 5 crore. The minimum punishment stands removed, and the punishment — whether fine, imprisonment, or both — is left to judicial discretion in every case, as per the council decision.
The general penalty, which applies where no specific penalty is provided, comes down from Rs 25,000 to Rs 10,000, the ministry said.
I feel that the authority has not been informed that ,
Most of the Group health policies provided by the employer are not with the employee money , the employer collects the premiums from the employee & take Group Health Insurance.
I mean to say this because , this is as good as Individual paying for his health Insurance thru. the employer .
In this case I request the authority to treat this as individual policy holder & can straightly.
Where employee bear full or part of the cost, the employer is not required to collect the GST portion on the premium, as they are going to get back as input credit. It would be less taxing on the employees.
Yes 100% correct.
Yes, correct.
No GST to be collected from employees.
Yes you are right Sir, since Employer gets Input Tax Credit from GST there is no need to for the employees to pay GST
A welcome step towards expanding insurance coverage. However, when employers recover group insurance premiums from employees’ salaries, shouldn’t the ITC benefit translate into better coverage or financial relief for employees? Affordable insurance and fairness to those who pay for it must remain the ultimate goals.
B.D. Sharma
State Co-ordinator for HP State
“Insurance for All by 2047 Mission”
Under the new tax regime, 80D benefits are not available.
Yes, the GST on GMC to be bear by the employer in full, as they are going to get back as input credit.
It should not be deducted from the employees/Pensioners.
Yes
GST should not be deducted from employees/ pensioners
Authority is not aware of the ground realities and employer didn’t inform GST authorities, particularly PS Insurers that a large portion of premium is recovered from the Employees and that is not required to be taxed. GST council is requested to seek and allow other stakeholders holders from Employees group to submit their representation for their consideration.
When Employer is not paying the health insurance premium and it is paid by Retires.How can it will be Group policy.please think it over.It will be burden to the Retires only.
What will be Gst status for the persons insured through Bank group medical insurance policies ?