Can businessmen claim Input Tax Credit under GST paid on LIC Policies

[Rajnish Bahuguna]

Dear Friends,

 

Can businessmen claim Input Tax Credit under GST paid on LIC Policies? Is there any circular in this regard?

 

With Best Regards,

Rajnish Bahuguna

Wealth Manager

Specialist: Children's & Retirement Planning 

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[Ram Tiwari]

No 

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[sudheer ms]

as per my information health insurance and life insurance cant claim input tax credit..

[Raghavendra Kamath]

Hi,

Understanding on query goes like this;

A registered dealer under GST regime can claim ITC on all expenditure which have been incurred for the furtherance of the business.

Furtherance of business is the threshold aspect to judge whether the GST suffered could be considered as ITC.  

Expenses of personal nature and GST sustained on them are disallowed.  

So, prudence to be applied for which purpose the expenditure is incurred. It should be necessarily for furtherance of one's business for which he is registered under GST.  E.g. telephone/mobile bills, travel, stay expenses etc. 

Here in this case, GST on LIC premium can be claimed as ITC assuming this businessman is a registered GST dealer and life insurance premia is paid to safeguard financial interests of this businessman which in turn affects his business.  So, GST sustained on life insurance premia is an eligible ITC.

Hope the above is clear to understand. 

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[Rajnish Bahuguna]

Dear Raghavendra Ji,

 

Thanks a lot for the detailed response.

 

With Best Regards,

Rajnish Bahuguna

Wealth Manager

Specialist: Children's & Retirement Planning 

Dedicated to Customer Delight

Mob.:-9911440170 / 9818519868.

Off:               2nd Floor, 62, Sector-9, Gurgaon, Haryana-122001

 

Delhi:        31B, First Floor, Jeevan Pravah Building,

                        District Centre, Janak Puri, New Delhi - 110058

 

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[sudheer ms]

Thank u sir. As per ur explanation i think only keyman insurance will come under this sense. If it is so then only for term insurance in lic.

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[Raghavendra Kamath]

Hi,

A sole proprietor of a business maintaining books of account u/s 44AA can claim GST on premium payments done.

Likewise partnership firm, joint stock company can claim ITC on life/health insurance paid on keyman/employee insurance.  

There is updated module in PS dept. LIC.  Seed correct GSTIN of your clients there so that whenever there is receipt for any premium or services GST is shown against client's GSTIN and made available in his electronic register.

[koorikkattil JANARDHANAN, FChFP]

No only on business you can claim.

On Saturday, December 23, 2017, sudheer ms <sudheer...@gmail.com> wrote:

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[pnmeghani meghani]

Yes if any body has proprietor ship firn, then he may claim

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From: liafis...@googlegroups.com <liafis...@googlegroups.com> on behalf of koorikkattil JANARDHANAN, FChFP <jana...@gmail.com>
Sent: Sunday, December 24, 2017 10:26 AM
To: liafis...@googlegroups.com
Subject: Re: (LIAFICHARY:17921) Can businessmen claim Input Tax Credit underGST paid on LIC Policies

 

No only on business you can claim.

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[sudheer ms]

Sir still doubts exists.
As per gst rule input tax credit will claim within one year from the first tax voucher generated. In life insurance if premium paid for one year then, is there any returns comes from lic within one year for claiming ITC? And as per my knowledge only term insurance is sold as keyman insurance which have no returns other than death benifits.  So how it will be applicable in lic premiums?

[Raghavendra Kamath]

Hi,

Whenever you pay lic premiums (any mode) date of payment and seeding GSTIN minds.  Automatically in 3 months time, such GST sustained on premium paid will reflect in your electronic credit ledger which can be used to set off output tax on sales.  Not only lic premiums, you can claim ITC on telephone.mobile bills, travel bills, hotel stay bills etc.

So, suggest your clients who are GST registered to seed GSTN with all service providers so avail ITC.  Please note that this is not applicable to composition dealers.    

[Amit Paliwal]

Only proprietorship type of business may claim the same for individual Life insurance policy issued to Proprietor only.

Other business entities such as HUF,  Partnerships,  Pvt Ltd firms may not allowed as they have different PAN. However Insurance policies purchased from company account for Directors or staff may claim.

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Amit Paliwal
09899126388