Recovery of Parental Insurance Premium from employees is NOT a ‘Supply of Service’ by company

Recovery of Parental Insurance Premium from employees is NOT a ‘Supply of Service’ by company – AAR Uttar Pradesh

Facts of the case:
Applicant is in the business of software development. It had provided group Mediclaim coverage to all its employees and their parents. Applicant recovered a fixed amount of sum from their employees for Mediclaim coverage of their parents.

Matters on which ruling is sought:

• Whether amount recovered from employees towards parental insurance premium would be a leviable to GST?

Findings and Ruling:

• As per ruling, it shall not be a supply as this is not an activity which is incidental or ancillary to the activity of developing software, or done in the course of or in furtherance of development of software business.

Source: [2020] 113 taxmann.com 609 (AAR – UTTAR PRADESH)