A healthy staff is always capable of delivering better results and is more beneficial for the long-run plans. The employee health check-up helps you to identify the health issues before they become severe or affect the employee’s performance. Health checkups are organized by the company and are conducted by doctors and nurses. According to the Appellate Authority of Advance Ruling (AAAR), the health check-up for employees should be treated as a medical service and not face goods and services tax.
The ruling will benefit many companies and associations that tie-up with hospitals and doctors for regular checkups inside or outside hospital premises. All the camps conducted for health checkups outside the hospitals or job-related health checkups done by the hospitals in various corporations for providing health checkup services, allied medical services, and ambulance services to their employees should be exempted under GST.
The AAAR modified an earlier ruling by Gujarat Authority for Advance Ruling that said 18% GST would be applicable on such health services. Naturopathy, Yoga, Ayurveda, Physiotherapy, and medication provided by certain institutes are 18% GST taxable.
This health check-up not only saves time and money but also identifies minor health issues before employees turn severe. According to AAAR, annual employee check-ups are exempt from GST, even if it is a precautionary measure and not connected to any illness. The essence of the transaction continues to be healthcare services. Also, there should not be any interpretation to deny the GST exemption benefit.
Not all employees are conscious of their health but providing them with health checkups without GST can encourage them to opt for a better and healthy lifestyle.