CA
116 Points
Joined December 2014
ITC is not available for rent-a-cab, health insurance and life insurance.
However, the following are exceptions, i.e., ITC is available for-
a. Any services which are made obligatory for an employer to provide its employee by the Indian Government under any current law in force
For example, assuming the government passes a rule for all employers to provide mandatory cab services to female staff in night shifts. ABC Ltd. hires a rent-a-cab to provide to transportation to its female staff on night shifts. Then ITC will be available to ABC Ltd. on the GST paid to the rent-a-cab service.
b. If the category is same for the inward supply and outward supply or it is a part of the mixed or composite supply
For example, ABC Travels lends out a car to XYZ Travels. Then XYZ Travels can claim ITC on the same.
Read our article on GST impact on cab services.