Clarification on Input tax Credit on staff welfare and medi-claims

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

Leave a Comment

Your e-mail address will not be published. Required fields are marked *