Whether ITC is available on canteen services provided to employees

Last updated: 14 January 2023
Quick Summary
The Gujarat AAAR has ruled that Input Tax Credit (ITC) is available on canteen services provided to employees when it's a legal obligation under the Factories Act, 1948. However, this ITC is restricted to the portion of the cost borne by the employer, excluding any amount recovered from employees.

Court :
Gujarat AAAR

Brief :
The credit will not available to the extent the same is embedded in the cost of food recovered from such employees. The AAAR relied on the judgment of the Hon'ble Bombay High Court in the case of CCE Vs Ultratech Cement [2010 (260) ELT 369 (Bom)].

Citation :
Tata Motors Ltd. [2022 (12) TMI 1363

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