Held: The activity of recovery of 50% of the cost of insurance premium cannot be treated as an activity done in the course of business or for the furtherance of business. The activity undertaken by the applicant of providing mediclaim policy for the employees’ parent through insurance company neither satisfies conditions of section 7 to be held as “supply of service” nor it is covered under the term “business” of section 2(17) of CGST Act 2017. Hence, the applicant is not rendering any services of health insurance to their employees’ parent and hence there is no supply of services in the instant case of transaction between employer and employee. (No. GST-ARA-19/2019- 20/B-108 dt. 4th October, 2019)
Jotun India P. Ltd. (2019) AIFTP Times -Nov- P 7 (Maha) (AAR)
GST – AAR -Maharashtra
“The Applicant offers optional Parental Mediclaim insurance for employees’ parents. As per this scheme, the Applicant initially pays the entire premium and 50% of the premium is recovered from the respective employees who opt for parental insurance scheme. Whether recovery of 50% of Parental Health Insurance Premium from employees, amounts to supply of service under Section 7 of the CGST Act, 2017 and whether GST is payable on recovery of 50% of the insurance premium from the salary of the employees? “