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ITC is not available on buses/ cars hired for transportation of employees.

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Input Tax Credit — Section 2(63) read with 2(62) of GST, 2017; Section 16 of CGST/HGST Act, 2017 - The Applicant is engaged in the business of supply of slide fasteners, chains, sliders etc. (‘Zipper’ or ‘Final Product’). In order to carry out its business of supply of its Final Product and for efficient functioning of its business as a whole, the Applicant has engaged various contractual service providers who provide transportation services and ensure that employees of the Applicant are able to reach the factories in time for doing their day to day work as scheduled. In this regard, the Applicant made a sample contract with a between Deep Travels (Contractor) for ‘Transportation Services’ to its employees from various locations to Factories. The Applicant in this respect sought Advance Ruling on various questions relating to eligibility of take Input tax credit; GST charged by the Contractor for hiring of buses for transportation of employees etc? The Authority Ruled out that the applicant is not eligible to take input tax credit on ”GST charged by the Contractor for hiring of buses for transportation of employees and; GST charged by the Contractor for hiring of cars for transportation of employees“.—YKK India Pvt. Ltd., In Re… [2018] 2 TAXLOK.COM 356 (AAR-Haryana)