ITC on GST paid on canteen facility is blocked credit under Section 17 (5)(b)(i) of CGST Act and inadmissible to applicant.
Authority for Advance Ruling —– Input Tax Credit in respect of Canteen facility --– The applicant is maintaining canteen facility to its employees at its factory premises to comply with the mandatory requirement of maintaining the canteen as per the Factories Act, 1948. The applicant submits that as per the proviso to Section 17(5) (b) of Act, 2017, ITC of GST paid on goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. The Applicant is recovering nominal amount on monthly basis to ensure use of canteen facility only by authorized persons/employees and expenditure incurred towards canteen facility borne by Applicant is part and parcel of cost to company. The applicant sought Ruling as to whether ITC is available to Applicant on GST charged by service provider on canteen facility provided to employees working in factory; whether GST is applicable on nominal amount recovered by Applicants from employees for usage of canteen facility; if ITC is available, whether it will be restricted to the extent of cost borne by the Applicant (employer).
Held that:- The Hon’ble Authority for Advance Ruling held that ITC on GST paid on canteen facility is blocked credit under Section 17 (5)(b)(i) of the Act and inadmissible to applicant. GST, at the hands on the applicant, is not leviable on the amount representing the employees portion of canteen charges, which is collected by the applicant and paid to the Canteen service provider.
ITC on GST paid on canteen facility is blocked credit under Section 17 (5)(b)(i) of CGST Act and inadmissible to applicant.
Authority for Advance Ruling —– Input Tax Credit in respect of Canteen facility --– The applicant is maintaining canteen facility to its employees at its factory premises to comply with the mandatory requirement of maintaining the canteen as per the Factories Act, 1948. The applicant submits that as per the proviso to Section 17(5) (b) of Act, 2017, ITC of GST paid on goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. The Applicant is recovering nominal amount on monthly basis to ensure use of canteen facility only by authorized persons/employees and expenditure incurred towards canteen facility borne by Applicant is part and parcel of cost to company. The applicant sought Ruling as to whether ITC is available to Applicant on GST charged by service provider on canteen facility provided to employees working in factory; whether GST is applicable on nominal amount recovered by Applicants from employees for usage of canteen facility; if ITC is available, whether it will be restricted to the extent of cost borne by the Applicant (employer).
Held that:- The Hon’ble Authority for Advance Ruling held that ITC on GST paid on canteen facility is blocked credit under Section 17 (5)(b)(i) of the Act and inadmissible to applicant. GST, at the hands on the applicant, is not leviable on the amount representing the employees portion of canteen charges, which is collected by the applicant and paid to the Canteen service provider.