Government Issues Clarification on Inquiries Related to LTC Cash Voucher Program

The Expenditure Department of the Ministry of Finance has published a list of clarifications on the recently introduced LTC cash voucher program. The clarifications will help central government employees to better understand the scheme and remove many of their doubts about the scheme’s operation.

Previously, the government had introduced the equivalent special package in place of the leave travel concession fee for central government employees during the 2018-21 block. However, in regards to the actual implementation and process to reap the benefits of the LTC cash voucher system, there were several inquiries seeking clarification from the government.

The clarification regarding the inquiries received about the special cash package in lieu of the leave travel concession fee for central government employees during block 2018-21 are as follows:

one. Is the individual employee required to take leave to use this LTC cash voucher program? Is an employee required to travel?

Clarification: A person does not need to take a license for this purpose or undertake any travel. This is an in lieu of LTC travel plan.

two. If a particular LTC that is intended to be used for the plan has been partially used by oneself or by family members, is this plan available and to what extent?

Clarification: This scheme is applicable to the LTC rate that was not used during the Block Year as mentioned in the LTC Cash Voucher Program Order dated 12.10.2020.

3. If an employee has already exhausted the prescribed vacation charge limit for LTC, will they be eligible for the plan? If an employee can only take advantage of the LTC rate without claiming the license fee

Clarification: An employee can take advantage of this scheme using the applicable LTC rate without charging the leave. The expense must be in accordance with the ratio prescribed for the LTC fee.

4. According to the plan, an amount of up to 100% of the leave payment and 50% of the value of the estimated fee will be paid as an advance to the employee who opts for the plan. It has also been stated that DDOs must account for the non-utilization / under-utilization of the advance in accordance with the extension provisions related to the LTC advance. If an employee spends only the anticipated amount and makes a claim, how will this claim be regulated?

Clarification: If according to the calculation suggested in the LTC Cash Voucher Program Order dated October 12, 2020, the refundable amount is less than the withdrawn advance, this would be treated as underutilization. However, after the claim calculation, the balance amount, if any, can be recovered from the employee.

5. Newly incorporated government employees are entitled to three Home Town and one Anywhere in India in a four-year block. How will this be regulated?

Clarification: The employee can use any of the available LTCs in a block year.

6. Under the special provisions of LTC, an employee regardless of eligibility can fly to places like Andaman and Nicobar, J&K and the Northeast with fare anywhere in India. In this case, what will the estimated fee be?

Clarification: The estimated fee has been calculated based on an employee’s normal eligibility and special packages would not be applicable for this scheme.

7. Should a single invoice be submitted for the purchase of goods or services or can multiple invoices be submitted?

Clarification: Multiple invoices are accepted. The purchase should have been made from the issuance date of the LTC Cash Voucher Program Order dated October 12, 2020, through the end of the current Fiscal Year. The purchase must have a GST of 12% or more and the payment must have been made in digital mode.

8. If there is any prescribed format to apply for this program.

Clarification: There is no prescribed format. A simple request that conveys the employee’s desire to make use of the scheme should be mentioned, if an advance is required for the purpose.

9. What are the items that will qualify for reimbursement under this scheme?

Clarification: All goods and services that attract a GST of 12% or more would qualify. The invoice must be sent with the GST details and the payment must have been made through digital mode.

10. An employee who has four LTC eligible family members wants to use this service for fewer than 4 members. Also, you want to use LTC for the rest of the members later.

Clarification: An employee can benefit from the scheme in part, that is, the LTC on behalf of the eligible family. Since this is an optional scheme, if any family member’s LTC rate has not been used for this purpose, those members can use LTC subject to the extension instructions under the LTC rules.

eleven. An employee incurs the expense before 3/31/2021 based on the invoice. Actual product or service received in April 2021.

Clarification: The refund is based on the production of an invoice with GST details. To the extent possible, the claim should be made and resolved well before March 31, 2021 to avoid last minute rush and resulting lapses.

12. For digital payment, an employee uses the credit card of his spouse or any member of the family.

Clarification: It is clarified that the invoice that is presented for reimbursement under the scheme must be in the name of the employee who uses the scheme.

13. Can services like interior decorating and phone bills be included?

Clarification: Any service with a GST component of more than 12% is allowed.

14. Any limit on the number of transactions?

Clarification: As far as possible, the number of transactions can be kept to a minimum to avoid difficulties or delays.

fifteen. Is it allowed to make purchases from the e-commerce platform?

Clarification: Acquisitions from the e-commerce platform are also allowed as long as the invoice or corresponding details are submitted.