Gst input eligibility
This query is : Resolved
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...
Please share your thoughts...
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
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
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10 March 2019
Madam, what you mentioned is after Amendment, so what about before that?
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)
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
GST Act is very clear free food facility is to be mandatory under any ACT . ITC is not eligible for Internal policy of Hotel
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 .
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