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GST Input Tax Credit

Tanvi Patel (Deputy Accounts Manager) (95 Points)

10 August 2020

Hello

Can we take input tax credit for purchase of Masks for Staff in the company

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7 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 10 August 2020

As per the Provision of Section 16(1) of the CGST Act 2017, Input Tax Credit (ITC) on Inputs, Input Services and Capital Goods used or to be used in the course of or furtherance of business can be claimed as ITC (subject to Section 17(5) of the CGST Act 2017).

As per above provision you can claim ITC on Mask Purchased for Company staff. It's for furtherance of business.

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ansh 99 (229 Points)
Replied 10 August 2020

As per section 17(5)b
any goods or service provided in nature of health services to employees will be a blocked credit infact anything in nature of staff welfare is a blocked credit
so u cannot take ITC of Mask expenses for staff

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Sanjay Rana (56 Points)
Replied 12 August 2020

In my view ansh is correct.

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 12 August 2020

In my view, it's not considered as health services,(like treatment of employees) it's prevention measures.

However, if it's blocked as per health services than also Inputs on the same can be claimed, if the same are obligatory (enforced by any Law for time being).
So, if any expense is mandated by the government on the employer, the employer will be able to claim ITC for the same.

As per the directives issued by the Ministry of Home Affairs (MHA) in this regards, it's compulsory for employers to follow directives for workplace as like:
Wearing of face cover is compulsory in all work places and adequate provision of the same should be made provision for thermal scanning, handwash, sanitizer will be made available at all entry and exit points and common areas ect......
So, ITC can be availed..

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Bhavika Kothari (CA) (1258 Points)
Replied 14 August 2020

As per section 17(5)(b) you are not eligible to take credit

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ansh 99 (229 Points)
Replied 16 August 2020

Dear sagar patel g

health insurance is also a protective measure ..
then why health insurance provided to employees is a blocked credit just because it is nature of staff welfare and the same is blocked credit .

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 16 August 2020

Dear Mr. Ansh
Health insurance is specifically mentioned in Sec.17(5) as blocked credit.

And kindly read second point also
if it's blocked but if it's compulsory / obligatory as per law than we can take ITC