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GST Council Backs ITC on Staff Insurance for Companies

The GST Council has recommended letting businesses claim input tax credit on health and life insurance bought for their employees. The move could lower costs for companies that provide group cover to staff.

The council also recommended ITC on certain services bought for resale. Pharma companies will get credit on free medicine samples and on goods destroyed after expiry, fixing a long-pending industry demand.

Finance Minister Nirmala Sitharaman announced the changes as part of a wider compliance-easing package. The proposals aim to fix long-standing credit blockages in the GST framework that businesses have flagged for years.

ITC on motor vehicles, however, remains under review. The council has not yet decided whether companies can claim credit on vehicles bought for business use, leaving fleet operators waiting.

The recommendations will need formal notification before they take effect. Businesses are watching for the fine print on eligibility and documentation. Tax experts say the final rules will decide how much relief actually reaches companies.

The package also touches prosecution thresholds and small-value notices. Together, the changes signal a push to make GST friendlier for compliant businesses while keeping a check on evasion.

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