Employers may soon be able to claim ITC on GST paid for employee insurance cover
- Posted on October 4, 2026
- By Business News Today
- 1 Views
- 1 min read
In brief
The GST Council is preparing to evaluate a significant fiscal proposal that could reshape employee benefits taxation in India. The initiative aims to allow businesses to claim input tax credits on group insurance premiums purchased for workforce protection. Currently, these policies face an 18 percent GST levy, creating substantial financial burden for employers. This potential reform could reduce operational costs and incentivize corporate investment in comprehensive employee insurance schemes, benefiting both organizations and their workforce.
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Employers may soon be able to claim ITC on GST paid for employee insurance cover
The GST Council is gearing up to consider a proposal regarding input tax credit for employee insurance premiums. Currently, businesses cannot claim input tax credit on insurance policies purchased for their employees. An 18 percent GST is imposed on these group insurance policies, impacting business expenses.
