ITC not available on Canteen Services provided to Employees

Last updated: 25 August 2021

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Quick Summary

The Gujarat Authority of Advance Ruling (GAAR) has determined that Input Tax Credit (ITC) is not available for GST charged on canteen facilities provided to employees. The ruling interprets Section 17(5)(b)(i) of the CGST Act, classifying this as blocked credit. Additionally, GST is not applicable on the nominal amount recovered from employees for using the canteen facility.

Court :
Gujarat Authority of Advance Ruling

Brief :
In M/s Tata Motors Ltd. [Advance Ruling No. GUJ/GAAR/R/39/2021 dated July 30, 2021], M/s Tata Motors Ltd ('the Applicant') has sought a clarification whether Input Tax Credit ('ITC') will be available on Goods and Services Tax ('GST') charged by service provider on canteen facility provided to employees working in factory and whether the same would be restricted to extent of cost borne by the Applicant. Along with that it has also been sought if GST is to be applicable on Nominal amount received by Applicant for usage of the canteen facility by the employees.

Citation :
Advance Ruling No. GUJ/GAAR/R/39/2021 dated July 30, 2021

Daily Limit Reached