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TMI Blog2021 (11) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST paid to the Insurance Company. Non-providing of Top Up Insurance/Parental Insurance coverage will not affect applicant's business by any way. Therefore, activity of recovery of the cost of insurance premium cannot be treated as an activity done in the course of business or for the furtherance of business. The activity undertaken by the applicant like providing of mediclaim policy for the employees and their parents (parents of the employees) through the insurance company neither satisfies conditions of section 7 to be held as supply of service (in the instant case, insurance service) nor is it covered under the term business of section 2(17) of CGST ACT 2017. Hence, we find that the applicant is not rendering any services of health insurance to their employees' parent and; hence, there is no supply of insurance services in the instant case of transaction between employer and employee. Thus, the recovery of the Top Up Insurance/Parental Insurance Premium from employees does not amounts to supply of service under Section 7 of the Central Goods and Service Tax Act, 2017. - GST-ARA-99/2019-20/B-92 - - - Dated:- 10-11-2021 - SHRI. RAJIV MAGOO, AND SHRI. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es who have opted for such top-up insurance. 2.4 Further, under the Insurance cover provided to employees under the Group Insurance policy, the employee is only eligible to claim the expenses incurred for medical treatment availed in respect of his own health. As per the 'Health Wellness Policy of the applicant, the employees have an option to include their parents under such policy (hereinafter referred to as parental insurance ). 2.5 To avail the aforesaid additional insurance cover by way of Top-up insurance and Parental Insurance, employees are required to contribute an additional amount as premium which is recovered by the applicant from the employees' salary. The amounts recovered by the applicants from the employees as premium towards Top-up insurance and Parental insurance is as under:= SI.No. Name of Policy Premium Contribution 1. Group Mediclaim Policy - Parental Insurance The Applicant recovers from its employees 50% of the premium paid towards the insurance cover of the either set of dependent parents or parents-in-law. The remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer. 2.14 The definition of 'business' provided under Section 2 (17) of CGST Act means any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity whether or not it is for pecuniary benefits. Further, any activity ancillary or incidental to the above-stated activities are also covered as business. Furthermore, as per definition, any activity undertaken by the supplier irrespective of the volume, frequency, continuity or regularity of such activity will be treated as business. 2.15 In the present case, the applicant is engaged in the activity of power generation and its transmission and distribution to the customers. The applicant has arranged for insurance cover for its employees, whereby the employees are given an option to take additional insurance cover by way of Top-up insurance or parental insurance. The applicant is not primarily engaged in the business of providing health insurance. In fact, the service of insurance is being provided by the Insurance Company. The applicant is only arranging for the insurance cover for its employees in accordance with its company policy and recovering the amount towards premium to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt from the employees could not be treated as an activity in the course or furtherance of business. Thus, the activity of providing parental insurance coverage to the employees neither satisfied the conditions of Section 7 of the CGST Act to qualify as 'supply of service' nor it was covered under the definition of the term business laid under Section 2(17) of the CGST Act. Hence, there was no supply of insurance service between the employer and the employee. 2.20 Thus, in the light of the submissions made above and decision of the Ld. AAR the recovery of amount towards insurance premium for tap-up insurance and parental insurance by the applicant from the employees does not qualify as supply of service in course or furtherance of business under Section 7 of the CGST Act. Therefore, the applicant would not be liable to discharge GST on the said amount recovered from its employees. 03. CONTENTION -A5 PER THE CONCERNED OFFICER: The jurisdictional/concerned officer has reproduced the provisions of Section 7 of the CGST Act, 2017 which defines the term 'supply; Schedule I to the CGST Act, 2017 which specifies the activities which are to be treated as supply ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he insurance company. After going through the sample copies of master insurance policy and the top-up policy submitted by the applicant, we find that the applicant initially pays the entire premium along with taxes and then the said premium is recovered from the respective employees as mentioned supra. The Applicant has contended that the applicant is not in the business of providing insurance coverage. Secondly, providing of employee insurance or parental insurance cover is not a mandatory requirement (under any law) for the time being in force and therefore, non-providing employee insurance or parental insurance coverage would not affect its business by any means. Therefore, as per the applicant, the activity of recovery of an amount towards insurance premium from the employees cannot be treated as an activity done in the course of business or for the furtherance of its business. The applicant has also submitted that, they have not availed input tax credit of GST charged by the insurance company. 5.5 The term supply is defined under Section 7 of the CGST Act, 2017 which is reproduced as under: 7. (1) For the purposes of this Act, the expression supply includes - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, (e) 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 any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club, and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities . 5.9 From the above definition, the term business broadly means any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity whether or not it is for pecuniary benefits. Any activity ancillary or incidental to these activities are also covered as business. It has al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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