The GST Council may allow input tax credit (ITC) on group health and life insurance premiums paid by employers and motor vehicles taken on lease, rent or hire at its upcoming meeting on Oct. 7, according to sources.
The proposal, if approved, could allow employers to claim ITC on GST paid on group insurance premiums. The GST Council may also consider providing ITC relief on motor vehicles taken on lease, rent or hire. The matters are expected to be taken up at the GST Council meeting on Oct. 7.
Employers currently pay 18% GST on group health and life insurance for employees but cannot claim ITC on the tax paid in most cases.
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The GST Council may also consider easing prosecution rules, as per sources. The GST Law Panel proposed higher tax-evasion threshold for prosecution. This included shorter jail terms proposed for GST offences. Criminal action is likely to be limited to serious violations. The move could reduce criminal proceedings in GST cases.
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The GST Council is set to consider the proposed changes on Oct. 7.
No major GST rate changes are expected at the aforementioned meeting, with the panel likely to focus instead on 'process reforms' and the implementation of the recently undertaken rate rationalisation, according to Finance Ministry sources. The Council is expected to review how the GST rate changes have been implemented over the past year, rather than undertake another broad-based round of rate cuts. The focus is likely to be on ironing out implementation issues and taking stock of the impact of the rate rationalisation.
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