QUESTION

1.A Bank sponsored by the Central, state and SBI paid insurance premium for EDLI whether GST paid on such insurance premium availabe as ITC to the Bank ? 2. My client has cash balance is Electronic Cash ledger through E-TDS is Rs. 50.00 lacs and inverted raqte structure crredit is more than Rs. 1.00 Crores then whether we may go claim for refund for both the things together or first we ask for cash refund and then we may go for refund for inverted rate structure? Thanking You

ANSWER

Facts of the case:1. A Bank has paid insurance premium for EDLI (not being life insurance or health insurance) and GST is paid on the same.
2. Refund claim of cash balance and inverted duty structure needs to be filed. Whether the two can be done simultaneously.

Law Applicable:As per Section 17(5) clause (b);
"the following supply of goods or services or both-
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or
aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance"

Interpretation:As per clause (b) to section 17(5), ITC of GST paid on insurance for life and health is restricted. Since EDLI insurance is not specifically restricted therefore it can be claimed as ITC.

As per section 54 of CGST, the refund for cash ledger and Inverted duty structure are 2 independent refund procedures not consequent to one another. Therefore they can be filed simultaneously.

Conclusion:1. ITC of GST paid on EDLI insurance premium is not restricted.
2. The two refunds of cash ledger and inverted duty structure can be filed simultaneously.(Reply dt.02-05-2020)