Gst input eligibility

This query is : Resolved

Saran sivan M (Querist)
Follow

10 March 2019 Whether ITC available on inputs used for providing free meals to employees, where company consider this as a staff welfare expense; ie; cost incurred in the course of furtherance of business.

Please share your thoughts...

CA Anita Bhadra

CA Anita Bhadra (Expert)
Follow

10 March 2019 Its a debatable issue
According to section 17(5) of the CGST Act, ITC shall not be available in respect of supply of certain goods or services. . However , CGST Amendment Act 2018 says - employers will be allowed to claim input tax credit (ITC) for supply of food, beverages, health services, life insurance, travel benefits renting or hiring of motor vehicles, given to employees, provided it is obligatory for them under any law.

In case , Your organization come under Factory Act 1948 and you are employing more than 250 staff , its mandatory to provide food ,then you can claim ITC on free meals to employees

Message likes : 1 times

Saran sivan M

Saran sivan M (Querist)
Follow

10 March 2019 Madam, what you mentioned is after Amendment, so what about before that?

Saran sivan M

Saran sivan M (Querist)
Follow

11 March 2019 As per internal policy of a 5 star hotel, Hotel HOD's are allowed to have food free of cost. Whether hotel can claim ITC on inputs used to provide the free food, considering latest amendment in sec 17(5)

CA Anita Bhadra

CA Anita Bhadra (Expert)
Follow

11 March 2019 In my opinion - No Hotel can not claim ITC

GST Act is very clear free food facility is to be mandatory under any ACT . ITC is not eligible for Internal policy of Hotel

CA Anita Bhadra

CA Anita Bhadra (Expert)
Follow

11 March 2019 Even before amendment - ITC on food facility was not eligible . It could be availed if there was any contractual obligation for employer to provide free food to employee .

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now