Medical health insurance premium to be taxed now: AAR

New Delhi: AAR specifies the amount of GST to be paid on employee medical health insurance premium. Companies, including statutory entities, will be liable to goods and services tax on medical health insurance premiums paid by their employees.

According to the Telangana Authority of Advance Ruling (AAR), even municipalities and other statutory entities that get tax exemption on various services provided by them, have to pay GST on medical health insurance premiums for employees. will have to pay. Read more: Want to update Aadhar card sitting at home? it will soon become a reality

The decision of Telangana AAR came in response to the request of M/s. Hyderabad Metropolitan Water Supply and Sewerage Board, which wanted to know whether it is bound to pay GST on medical insurance premiums paid for providing health insurance to employees, pensioners and their family members. Read More: LIC Jeevan Umang Policy: Here’s How To Get Rs 36,000 Pension By Saving Rs 45 A Day

The application also requested an earlier decision on the taxability of vehicle insurance policies purchased to cover the vehicles of the Board. The AAR stipulated that services provided by a municipality are eligible for GST exemption under Article 243W of the Indian Constitution. These services are directly related to the functions specified in the 12th Schedule for such organizations.

The AAR found that the insurance services purchased by the applicant had no relation to the activities performed by him under Article 243W, and hence these services are not eligible for exemption. The AAR stipulated that premiums paid for vehicle insurance are excluded if the vehicle is used to fulfill statutory responsibilities assigned to municipalities.

Such vehicles shall not be directly related to the work done under Article 243W if they are used for the transport of employees, members of the Board or others. Consequently, AAR concluded that it would not be eligible for exemption.

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