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Itc on canteen service

sandeep (Accountant) (111 Points)

02 August 2019

The company provides canteen service ( Food & Tea Coupon) to employees . Company collects GST from employees and company discharged the liability every month. For Canteen Service , company purchases food and Gas Cylinders which includes 5% , 12% and 18% GST.

My question is that can company claim ITC on such inward supply.

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9 Replies

Anshul Jain (Professional) (190 Points)
Replied 02 August 2019

No.

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 02 August 2019

Yes if you are further charging 18%

Anshul Jain (Professional) (190 Points)
Replied 02 August 2019

Originally posted by : Pankaj Rawat
	Yes if you are further charging 18%

Sir,

Notification No. 47/2017-CT (Rate) provides that services supplied by way of supplying food in canteen attract 5% GST and supplier cannot avail ITC.

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Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 02 August 2019

kindly refer the amendment act 31 of 2018 being effective from 1/2/19

Anshul Jain (Professional) (190 Points)
Replied 02 August 2019

Originally posted by : Pankaj Rawat
	kindly refer the amendment act 31 of 2018 being effective from 1/2/19

Sir,

Please help me with the exact provision. Also, if you are referring to Section 17(5), it is not applicable in the present case. It will be applicable only when such a service provider is allowed to charge 18% GST. However, in the present case, the Company can only charge GST @ 5% as per above referred notification.

Thanks

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Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 02 August 2019

Dear Anshul

Clause 9 of Amendment Act, 2018, sec.17(5)(b) is amended w.e.f 1.2.19, Outdoor catering can availed , where the provision of such goods & Services is obligatory for an employer to provide to it's employees under any law for time being in force.
Thus one may a view that employer may able to avail credit on caterer services if GST at full rate is being charged (Credit is not available if 5% rate is charged)

Note : It's my way of elucidating the LAW

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Anshul Jain (Professional) (190 Points)
Replied 03 August 2019

Ok sir. I just want to understand that can we read the proviso for 17(5)(b)(i) or it is only for b(iii)

sandeep (Accountant) (111 Points)
Replied 03 August 2019

In our case it is not obligatory to provide the canteen service to employees under any law. also we are charging 5% GST on Canteen Service. So the conclusion is , we are not able to claim ITC on inward supply.

Thanks to both of you for help me out.

1 Like