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2020 (9) TMI 1246 - AAAR - GSTInput Tax Credit - GST charged by vendor for Canteen services availed by for its employees - levy of GST on distribution of Coupons among employees - classification of services - Is it correct to determine the fair market value of coupons, based on the rate charged to employees? - ITC on gift items for business promotion. Canteen services - HELD THAT:- No-profit and mandatory services being provided under legal obligation are tied to the employer's obligation towards the employees. These services, we find, are uniformly available to all the employees and are not restricted to any class of employees. These canteen services are, therefore, available to the employees essentially as a facility in the course of their employment. These are akin to facilities like uniform, safe-environs and first-aid - a provisioning of canteen service to employees is not a taxable activity chargeable to GST. Is it correct to determine the fair market value of coupons, based on the rate charged to employees? - HELD THAT:- The activity itself being outside the tax net, there is no need for the valuation of the same for taxation purposes. Whether company is eligible to take Input Tax Credit on GST charged by vendor for Canteen services availed by it for its employees? - HELD THAT:- The provisions of sub-Section 17(5)(b) have since been amended w.e.f. 1.02.2019 - the substitution w.e.f. 1.02.2019 has imparted clarity to the relevant provisions of Section 17(5). After the substitution, it is now clear that Input Tax Credit on the 'Food and Beverage' services are available only where the registered person is making an outward taxable supply of the same category of goods or services. The benefit of the proviso to sub-Section 17(5) “Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. “ has been made available only to the activity of “(Ui) travel benefits extended to employees on vacation such as leave or home travel concession”. The same is not available to the canteen service/ (supply of Food and Beverages as a service) - thus, the Input Tax Credit is not admissible to the Applicant. Canteen Facility - Whether company is eligible to take Input Tax Credit on GST charged by vendor for Canteen services availed by it for its employees? - HELD THAT:- No. Company M/s. Musashi Auto Parts India Private Limited is not eligible to Input Tax Credit on the GST charged by vendor, for Canteen services availed by it and provided to its employees. Whether distribution of Coupons among employees attracts GST liability? If yes, under which SAC (Services Accounting Code) tax shall be deducted? - HELD THAT:- No. Distribution of Coupons among employees does not attract GST liability. Gift items - Whether company is eligible to take ITC on such business promotion expenses or not? - HELD THAT:- The ITC is admissible subject to the restrictions provided under Section 17 of the GST Acts. It is observed that sub-Section 17(5), clause (g) clearly forbids ITC admissibility on the items of personal consumption - thus it is clear that the ITC cannot be taken by a taxable person on the items i.e. goods and services which are used for personal consumption. The items mentioned by the Appellant viz. Sweets; Dry fruits; Electronic Items and Gold & Silver Coins etc. are essentially being given to the relevant persons as items of personal use/ consumption. The ITC, thus, is not admissible on the same.
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