75th Founding Day Lecture Meeting on “India@2030” Know More

July 2012

Cenvat credit — Service tax on group medical insurance policy — Mandatory requirement — Held, though a welfare measure, is in relation to business as defined in the definition of ‘input service’ — Eligible as credit.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
fiogf49gjkf0d
40. (2012) 26 STR 383 (Kar.) CCE, LTU, Bangalore v. Micro Labs Ltd.

Cenvat credit — Service tax on group medical insurance policy — Mandatory requirement — Held, though a welfare measure, is in relation to business as defined in the definition of ‘input service’ — Eligible as credit.


Facts:

The respondent claimed credit of Service tax paid on group medical insurance. It was mandatory on the part of the respondent u/s.38 of the Employees State Insurance Act, 1948. The credit was denied on the ground that insurance service was not specified in the definition of ‘input service’.

Held:

 Merely because the service is not specified in the definition, credit cannot be denied. Service tax on all those services which have been utilised by the assessee directly or indirectly in or in relation to the manufacture of the final products is eligible as CENVAT credit. Employee Mediclaim Insurance though a welfare measure, is a statutory obligation which the assessee needs to obey. CENVAT credit admissible.

Download PDF

You May Also Like

VAT on Builders and Developers

Penalty — Service tax registration not obtained and Service tax not paid — However, the details of commission paid available in the balance sheet — The details were submitted as soon as asked by the Department — Substantial portion of Service tax paid — Nonpayment not considered as wilful — Penalty set aside.