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The recovery of Parents Health Insurance expenses from employee does not amount to "Supply of Service" under the GST Law.

Classification of Supply The following questions have been posted by the applicant, in its application dated 8-7-2019 (received by the Authority on 15-7-2019), before the Authority :-

(i) Whether amount recovered from the employees towards parental insurance premium payable to the insurance company would be deemed as "Supply of Service" by the applicant to its employees?

(ii) If the first question is answered in affirmative, whether the value of aforesaid supply would be NIL, being provided in the capacity of a "Pure Agent"? If valuation is not accepted as NIL, what would be the value of such supply?

(iii) If GST is payable on the such amount recovered from the employees, whether the proportionate GST paid by the applicant to insurance company towards parental insurance would be admissible as input tax credit against supply of insurance services for employees' parents?

Held that :- (I) Whether amount recovered from the employees towards parental insurance premium payable to the insurance company would be deemed as "Supply of Service" by the applicant to its employees?

Answered in negative.

(II) If the first question is answered in affirmative, whether the value of aforesaid supply would be NIL, being provided in the capacity of a "Pure Agent"? If valuation is not accepted as NIL, what would be the value of such supply?

As the answer of question no. I is in negative this question doesn't need answer.

(III) If GST is payable on the such amount recovered from the employees, whether the proportionate GST paid by the applicant to insurance company towards parental insurance would be admissible as input tax credit against supply of insurance services for employees' parents.

Answered in negative. — Ion Trading India Private Limited, In Re… [2019] 16 TAXLOK.COM 217 (AAR-UP)