In re Hyderabad Metropolitan Water Supply And Sewerage Board (GST AAAR Telangana)
No GST exemption to HMWSSB on Medical insurance premium for employees, pensioners & their family members
The Telangana State Appellate Authority for Advance Ruling (“TAAAR“) in the case of M/s. Hyderabad Metropolitan Water Supply and Sewerage Board (Order in Appeal No. AAAR/12/2022) upheld the ruling passed by Advance Ruling Authority (“the AAR”) of not providing the benefit of exemption under entry no. 3 of the Notification 12/2017-Central Tax (Rate) dated June 28, 2017 (“Exemption Notification”) wherein the payment was made for medical insurance premium for employees, pensioners, and their family members.
Facts:
M/s. Hyderabad Metropolitan Water Supply and Sewerage Board (“the Appellant”) is a Board constituted under the provisions of Hyderabad Metropolitan Water supply and Sewerage Act, 1989 with the function and responsibility interalia including supplying of portable water and operations and management of water supply system.
The Appellant is set up by an act of State Legislation to carry out the function entrusted to a Municipality under Article 243W of the Constitution, hence, is a government authority as defined under the Exemption Notification.
The Appellant availed medical insurance services for their employees, pensioners, and their family members. Further, it also availed insurance services for vehicles owned by it.
The AAR vide TSAAR 28/2022 dated June 3, 2022 passed the ruling that payment of medical insurance premium by the Appellant for their employees, pensioners and their family members were not in relation to services entrusted under article 243W of the Constitution of India and hence, the Appellant was not eligible for availing exemption under entry no. 3 of the Exemption Notification.
However, insurance services availed by the Appellant for vehicles which have direct relation with services entrusted in the Article 243W of the Constitution were eligible for exemption under the said entry of the Exemption Notification.
Issue:
Whether medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members and Vehicle Insurance Policy taken to provide insurance to the vehicles owned by the Appellant, eligible for exemption as mentioned in Entry No. 3 of the Exemption Notification?
Held:
The AAAR held as under:
