GST Input Tax Credit Now Allowed for Business Insurance Purchases

Businesses will now be permitted to claim input tax credit (ITC) on insurance premiums, reversing an earlier restriction on such purchases. The change expands the scope of claimable credits across the goods and services tax regime.

Under the revised framework, ITC will also be available when companies buy and resell certain services within their line of business. Eligible services include restaurant and catering offerings, hotel room rentals capped at ₹7,500 per night, and fitness services.

The move is expected to reduce the tax burden on businesses operating in hospitality, food service, and wellness sectors by allowing them to offset input taxes paid on these service purchases against their output tax liability.