Businesses can now claim ITC on some insurance purchases
In short
Businesses buying some insurance cover can now claim input tax credit. ITC will also be allowed when companies buy and resell certain services in the same line of business, including restaurant and catering services, hotel rooms up to ₹7,500 a night, and fitness services.
This should reduce tax cost for some firms, but the reporting does not explain the full rule change or which businesses are excluded.
What the reporting says
Businesses buying insurance cover will no longer face an input tax credit block, and ITC will also be allowed when firms buy and resell certain services in the same line of business. The publisher summary says this covers restaurant and catering services, hotel rooms costing up to ₹7,500 a night, and fitness services. The immediate consequence is lower tax friction for covered businesses, but the full policy wording is not stated.
Why it matters
The reporting says companies buying insurance cover will no longer face an input tax credit block, and ITC will also be allowed for certain buy-and-resell services in the same line of business. The examples given are restaurant and catering services, hotel rooms up to ₹7,500 a night, and fitness services. The immediate effect is a narrower tax burden for eligible businesses, though the full scope is not stated.