Businesses can now claim input tax credit on health and life insurance bought for employees. The 57th GST Council recommended easing blocked credits on October 8.

Earlier, companies could not claim credit on GST paid for employee insurance cover. Now they can. The Finance Ministry said almost every organised employer provides such cover. Lower costs should help spread insurance and support the industry.

Credit will also be allowed on telecom towers and pipelines outside factories. Pharma and FMCG firms get credit on free samples and expired goods that must be destroyed by law.

A service bought and resold in the same line of business will be taxed only once. This helps hotels, restaurants and transport services.

The decision on motor vehicles is pending. The Council will decide later on credit for vehicles seating up to 13 persons.

Experts said the move will cut tax cascading and free up working capital.

The Council also eased refund rules. Refund of tax on input services is now allowed for credit taken on or after November 1, 2026. The exclusion of plant and machinery from refunds was removed. A Committee of Officers will study buyer protection within three months.