Input tax credit- Section 17(5) of CGST Act- In the instant case, the appellant is engaged in the manufacture and supply of auto parts and is registered under GST in Faridabad.

Advance Ruling was requested on the following questions:-

CANTEEN SERVICES

a. “Whether company is eligible to take Input Tax Credit on GST charged by vendor for Canteen services availed by it for its employees;

b. Whether distribution of Coupons among employees attracts GST liability? If yes, under which SAC (Services Accounting Code) tax shall be deducted;

c. Is it correct to determine the fair market value of coupons, based on the rate charged to employees;”

DISTRIBUTION OF GIFT ITEMS FOR BUSINESS PROMOTION

a. “Whether company is eligible to take ITC on such business promotion expenses or not?”

ADVANCE RULING

The Advance Ruling Authority gave the following Ruling:-

a. “The company is not eligible to take ITC on GST charged by vendor for Canteen services availed by it for its employees;

b. The distribution of coupons among employees will attract tax liability.

c. The Coupon value shall form part of the total taxable value of the caterer i.e. service provider.”

and

a. “The company is not eligible to take ITC on business promotion expenses”.

Held that- Company M/s. Musashi Auto Parts India Private Limited is not eligible to Input Tax Credit on the GST charged by vendor, for Canteen services availed by it and provided to its employees.

Distribution of Coupons among employees does not attract GST liability.

Since distribution of Coupons among employees does not attract GST liability, there is no need to determine any value for that purpose.

Applicant is not eligible to take ITC on such business promotion expenses.