LTC cash voucher scheme: Govt further clarifies the rules

Central government employees availing the LTC cash voucher scheme can purchase goods or services in the name of spouse or other family members eligible for LTC fare.

The second set of FAQ issued by the Department of Expenditure also clarified that an employee can claim reimbursement for the purchase of goods and services, attracting GST of 12 per cent or more, on or after October 12 even if he/she has not formally exercised the option of availing the scheme.

The government on October 12 announced the LTC cash voucher scheme under which employees can purchase any goods or services with a GST rate of 12 per cent or above to avail the benefit.

The payments for such purchases have to be made via digital mode or cheque, demand draft, NEFT/RTGS.

So far employees had only Leave Travel Concession (LTC) benefits on travels made or forgo the amount.

To a query on whether purchase receipt can be in the name of any dependent, the FAQ said, "The invoices of the goods and services purchased as per the scheme may be in the name of spouse or any family member who are eligible for LTC fare as declared in the service records."

The expenditure department, under the finance ministry, said the special cash package scheme in lieu of one LTC is to "compensate and incentivise consumption" by government employees and the benefits can be availed up to March 31, 2021.

The FAQ also clarified that purchase of goods or services on EMI is also permissible under the scheme provided they have been bought after October 12 and have a GST invoice.

With regard to a query on whether reimbursement would be available for items purchased after October 12, 2020, but before formally exercising the option of LTC cash voucher scheme, the FAQ said, "All eligible purchases on or after October 12, 2020, but before March 31, 2021, can be counted."

Photograph: Amit Dave/Reuters