GST reforms 2026: Employers get ITC on employee health, life insurance premiums

The GST Council allowed employers to claim input tax credit (ITC) on GST paid on health and life insurance policies taken for their employees, a move that is expected to lower the effective cost of employer sponsored coverage. The Council recommended amendment in section 17(5) of the CGST Act, 2017 to remove the restrictions on availment of ITC inter-alia on.

The GST Council has recommended allowing employers to claim input tax credit on GST paid for health and life insurance policies taken for employees. The move could reduce the effective cost of employer-sponsored coverage, particularly benefiting small businesses, while making group health insurance more affordable and improving employee benefits.

Summarised by Agaah from Economic Times. Agaah aggregates 36 sources and removes duplicate coverage — all news, one place.