In re United India Insurance Company Limited (GST AAR Tamilnadu)
The application of GST exemptions to insurance services provided by United India Insurance Company Limited to Tamil Nadu State Government (TNSG) employees is a crucial aspect of taxation under India’s GST regime.
The primary issue addressed by the applicant before the Advance Ruling Authority pertains to the GST exemption eligibility of health insurance services provided to TNSG employees under SI No. 40 of Notification No. 12/2017- Central Tax (Rate). The applicant, United India Insurance Company Limited, offers a group health insurance policy to TNSG employees, covering their health and that of their families. It’s highlighted that the premium for this policy is fully funded by the TNSG, with no contribution from the employees themselves.
The eligibility for exemption hinges on several conditions laid out in the notification:
- Service Recipient: The insurance service must be provided to the State Government.
- Insurance Scheme: The service must fall under any insurance scheme.
- Payment of Premium: The total premium for the insurance scheme must be paid by the State Government.
The applicant clarifies that while the TNSG recovers nominal amounts (ranging from Rs. 300 to 500) from employees, the insurance premium is wholly borne by the government. The applicant does not dictate these recovery terms, nor does it have any contractual relationship with the employees regarding premium payment.
