Will EMI purchases qualify for LTC Cash Voucher Scheme? Find out as govt issues 2nd set of FAQs

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November 12, 2020 11:09 AM

The government has released a new set of clarifications regarding queries received in respect of LTC Cash Voucher Scheme for Central Government Employees during the Block 2018-21.

LTC Cash Voucher Scheme, Central Government Employees, EMI purchases, 12% GST, FAQ, e-commerce websiteSnapdeal had raised investments from Alibaba, SoftBank, Nexus Venture Partners, Anand Piramal in the past.

Under the Special cash package equivalent of Leave Travel Concession Fare for Central Government Employees during the Block 2018-21, the purchase of any goods or services which attract GST of 12% and above qualifies for reimbursement under this scheme. But, will the purchases on EMI basis also permissible? This and several other questions have come to the forefront by the employees.

The government has released a new set of clarifications regarding queries received in respect of Special cash package equivalent of Leave Travel Concession Fare for Central Government Employees during the Block 2018-21. This is the second set of frequently asked questions (FAQs) to help the employees make an informed decision.

The Special Package equivalent in lieu of Leave Travel Concession Fare for Central Government Employees during the Block 2018-21 was initially announced by the Government on 12th October, 2020. Similar income-tax exemption for the payment of cash equivalent of LTC fare was also extended to the non-Central Government employees also. Thereafter, a set of frequently asked questions were issued on 20th October, 2020 by the government.

Some of the latest FAQs regarding LTC Cash Voucher Scheme are:

1. An employee whose workplace and hometown are same and is eligible for only one all India LTC in one Block Year. If that LTC is exhausted, will he be eligible for this scheme?

Clarification: No. The scheme is in lieu of one LTC available during the block year.

2. If an employee does not have enough leave or less than the minimum balance of 40 days which is required in his leave account and avail leave encashment for LTC, whether he will be eligible for leave encashment in this scheme?

Clarification: Leave encashment is to be in accordance with LTC Rules. The employee can, however, avail the benefit of scheme without the leave encashment if such encashment is not available.

3. If an employee has already availed hometown LTC(only for self) for 2018-19 along with leave encashment, can he now claim LTC cash voucher scheme with LTC for self from block year 2020-21 and for remaining family members from block 2018-19?

Clarification: Yes. He can claim leave encashment as per the scheme provided it does not exceed the maximum limit of 60 days eligible for encashment.

4. If both husband and wife are working in the central government, if one is availing LTC cash voucher scheme for self and spouse and also taking LTC leave encashment, then can the spouse avail LTC leave encashment separately?

Clarification: Yes, in such a case the spouse avail LTC leave encashment separately.

5. If an employee avails only deemed LTC fare without leave encashment, and spends less than or equal to three times of the deemed fare entitlement, how much reimbursement will he get?

Clarification: In such a case the reimbursement will be on pro-rata basis.

6. Whether purchase of goods/services on loan/EMI, will be covered under this scheme?

Clarification: Purchase of any goods or services which attract GST of 12% and above qualify for reimbursement under this scheme. Purchases on EMI basis are also permissible. The purchase should have been effected after the issue of the order i.e. 12.10.2020 and should have an invoice.

7. For those officials having three Hometown LTCs and one all India LTC, can they avail special cash package for year 2020 in 2021(upto 31.03.2021) and avail LTC for 2021 also in 2021?

Clarification: The scheme is valid up to 31.3.2021 and is in lieu of the available LTC. An official may avail LTC for 2021 in 2021 provided the same has not been foregone in lieu of the benefits of the said scheme.

8. If a fresh recruit who is governed by LTC Rules for New Recruits is in his 8th year after recruitment opts for this scheme, can he submit bills having date of January-March 2021?Clarification:

Clarification: Yes, but one block year of LTC/ or one LTC to be foregone to avail the benefits of the Special Scheme.

9. If an employee has already exhausted 60 days of Leave 10 days Leave Encashment?

Clarification: No. He can avail only deemed fare value.

10. If an employee is availing Cash scheme against year 2018-19(extended till 31.12.2020), can he submit bills from January, 2021 to March, 2021?

Clarification: Yes, provided the transactions occurred on or after 12.10.2020 and bills are submitted before 31.03.2021.

11. Whether any advance will be given like LTC advance?

Clarification: It has been stated that an amount up to 100% of leave encashment and 50% of the value of deemed fare may be paid as advance into the bank account of employee.

12. I availed home LTC in 2019. What is my eligibility position for LTC cash voucher scheme?

Clarification: This scheme is for the LTC block of 2018-21. Normally, a block contains two LTC fare (home town and anywhere in India). If one has been availed and the other remaining, the same can be utilized for this purpose. Any unutilized LTC of the block of 2018-21 is eligible.

13. How spending of 3 to 4 times on purchasing of products will be tracked? Will purchase made online from e-commerce website be acceptable?

Clarification: Any purchase with digital mode is to be supported by invoice. Based on production of invoice the spending is calculated. The intention of this scheme is to encourage every mode of purchase. It is for the employee to choose a suitable digital mode.

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