Q&A on LTC Scheme: Can you make multiple purchases, pay in cash? Here are the answers

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Updated: Oct 21, 2020 8:04 PM

The LTC Cash Voucher Scheme has made the eligible employees curious, who want to know how to avail the scheme, what to purchase, how to pay etc.

Leave Travel Concession, LTC, Cash in lieu of LTC, LTC Cash Voucher Scheme, what to buy with Cash in lieu of LTC, GST, GST Receipt, GST Invoice, Q&A on LTC SchemeState governments and private sector organisations are also allowed to avail the scheme.

With people preferring not to travel during the Covid-19 pandemic, the government has rolled out the LTC Cash Voucher Scheme – that offers cash in lieu of Leave Travel Concession (LTC) – with the expectation that some additional demand may be generated for non-essential goods and services.

By availing this scheme, Central Government employees and those working in Public Sector Banks (PSBs) and Public Sector Undertakings (PSUs) may may get reimbursement as per their LTC entitlement on purchase of goods and services till March 31, 2021.

State governments and private sector organisations are also allowed to avail the scheme.

The scheme has made the eligible employees curious, who want to know how to avail the scheme, what to purchase, how to pay etc.

LTC Scheme: Remember! Saving on taxes will give you no benefits

The following Q&A aims to answer some of the queries on the LTC Cash Voucher Scheme:

Q: Whether a single bill of purchase of goods or services is to be submitted or multiple bills can be submitted?

Ans: Multiple Bills are accepted. The purchases should have been done from the date of issue of the Office Memorandum (O.M.) till the end of the current Financial Year (i.e. March 31, 2021).

Q: Is there any limit on the number of transactions?

Ans: As far as possible, the number of transactions may be limited to a minimum extent to avoid any difficulty / delay.

Q: What are the items which will qualify for reimbursement and what should be the mode of payment under this scheme?

Ans: Any goods and services which attract GST of 12 per cent and above would qualify. The invoice with GST details should be submitted and payment should have been made through digital mode.

Q: For digital payment, can an employee use credit cards of his/her spouse or any family members?

Ans: It is clarified that the invoice, which is being submitted for reimbursement under the scheme should be in the name of the employee who is availing the scheme.

Q: Can services like interior decoration and phone bills be included?

Ans: Any service which is having a GST component of 12 per cent or more is permissible.

Q: Is it allowed to do purchases from e-commerce platforms?

Ans: Procurement from e-commerce platform is also permissible provided the relevant invoice / details are submitted.

Q: An employee incurs the expenditure on or before March 31, 2021 on the basis of invoice. Can he/she get the reimbursement if the product or services received in April 2021?

Ans: The reimbursement is based on production of invoice with details of GST. As far as possible, the claim should be made and settled well before March 31, 2021 to avoid any last minute rush and resultant lapse.

Q: Is there any prescribed format for applying for this scheme?

Ans: There is no prescribed format. A simple application conveying the desire of the employee for availing the scheme.

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