Input tax Credit on staff welfare and medi-claims:
Q: Can GST be claimed for Staff Welfare Expenses on account of preventive measures taken for COVID spread. Eg: Purchase of masks, sanitizers, transport of workers etc?
A: Generally, ITC of GST cannot be availed on staff welfare expenses such as food, transport of workers, Insurance claim and human consumption items.
However, Inputs on same can be claimed if the same are OBLIGATORY (enforced by any law for the time being).
Statutory laws in Force: Epidemic Diseases Act, 1897 & Disaster Management Act, 2005.
ITC Claims that can benefit Enterprises expending for
COVID: 1.Masks,Sanitizers and similar equipment : Before Pandemic: Not Eligible-If for personal consumption.During Pandemic: Eligible.
2.Rent or Hire of Vehicles for Workers Transportation:Before Pandemic: Not Eligible.During Pandemic: Eligible.
3.Health Insurance for Workers:Before Pandemic: Not Eligible.During Pandemic: Eligible.
4.Food and beverages:
Before Pandemic: Not Eligible.
During Pandemic: Not Eligible. Since not mandated by law.
Note: GST claim possible only if the above expense is made against a GST Invoice which must also have the GST details of the entity purchasing/availing such goods or services