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TMI Blog2020 (1) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... for employees' parents is definitely not an activity which is incidental or ancillary to the activity of developing software, nor can it be called an activity done in the course of or in furtherance of development of software as it is not integrally connected to the business in such a way that without this the business will not function. - Order No. 41 - - - Dated:- 25-9-2019 - Shri Sanjay Kumar Pathak and Vivek Kumar Jain, Members ORDER M/s. ION Trading India Private limited, Building No. 2, Infospace, 4-6th Floor, Block-B, Plot-2, Sector-62, Noida, Uttar Pradesh (hereinafter called the applicant) is a registered assessee under GST having GSTN 09AAECA4325RIZ9. 2. The applicant is a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service by the applicant to its employees? (ii) If the first question is answered in affirmative, whether the value of aforesaid supply would be NIL, being provided in the capacity of a Pure Agent ? If valuation is not accepted as NIL, what would be the value of such supply? (iii) If GST is payable on the such amount recovered from the employees, whether the proportionate GST paid by the applicant to insurance company towards parental insurance would be admissible as input tax credit against supply of insurance services for employees' parents? 5. The applicant has further submitted that as per their view they are in the business of development and export of software which is its business activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in personal hearing. During the personal hearing the authorized representative stated that they would like to submit few more documents viz. copy of Employee Handbook , Trail of financial transactions, Offer letter/ Employee Contract to support their case. The said documents were emailed by the applicant vide email dated 30-9-2019. 8. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/ views/verification report on the matter, which were received in this office vide letter C. No. V (30) Tech./ Div-II/Adv. Rule/ 37/2019-20/8880, dated 18-9-2019, wherein it has been reported that the applicant is not rendering any service of insurance, hence as per law there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid supply would be NIL, being provided in the capacity of a Pure Agent ? If valuation is not accepted as NIL, what would be the value of such supply? (iii) If GST is payable on the such amount recovered from the employees, whether the proportionate GST paid by the applicant to insurance company towards parental insurance would be admissible as input tax credit against supply of insurance services for employees' parents? 12. The first question before us to decide is to whether the amount recovered from the employees towards parental insurance premium payable to the insurance company is a Supply of service by the applicant to its employees. 13. We observe that Section 7(1) of the CGST Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce this entire amount is paid to the insurance company which is providing mediclaim facilities to the employees and their parents. Such recovery of 50% premium amounts by the applicant from their employees cannot be supply of service under the GST laws . Observing this, the Authority has ruled that : The recovery of Parents Health Insurance expenses from employee does not amount to Supply of Service under the GST Law.... 18. From aforesaid discussion, we observe that the recovery of premium amount from employee and subsequent deposit it with insurance company cannot be treated as supply of service in the course of furtherance of business. Providing insurance facility to employees' parents is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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