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2020 (9) TMI 352 - AAR - GSTInput Tax Credit - GST charged by service provider on hiring of bus/motor vehicle having seating capacity of more than thirteen person for transportation of employees to & from workplace - levy of GST - nominal amount recovered by Applicants from employees for usage of employee bus transportation facility in non-air conditioned bus - restriction to the extent of cost borne by the Applicant (employer). HELD THAT:- In the subject case, the supply of services received by the applicant is used in the course or furtherance of their business and therefore prima facie. they are eligible to take credit of GST charged by their suppliers - while we find that the applicant is eligible to take ITC under the provisions of the CGST Act, it is to be seen whether Section 17 (5) of the said Act debars the applicant from taking credit. As rightly pointed out by the jurisdictional officer, Section 17 (5) has been amended by CGST (Amendment) Act. 2018 (No. 31 of 2018) dated 29.08.2018 made effective from 01.02.2019 vide Notification No. 02/2019 - C.T.- 2019 dated 29.01.2019. It is clear and apparent that Section 17 (5) had clearly debarred Input Tax Credit on motor vehicles or conveyances used in transport of passengers till the date of the amendment i.e. 01.12.2019. However with effect from 01.12.2019, Input Tax Credit has been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than thirteen persons (including the driver) - in the subject case, since the applicant has specifically submitted and as agreed by the jurisdictional officer, that they are using motor vehicles having approved seating capacity of more than thirteen persons (including the driver), the applicant shall be eligible for Input Tax Credit in this case. Whether GST is applicable on nominal amount recovered by Applicants from their employees for usage of employee bus transportation facility in non-air conditioned bus? - HELD THAT:- Schedule III to the CGST Act which lists activities which shall be treated neither as a supply of goods nor a supply of services As per clause 1 of the said Schedule-III, Services by an employee to the employer in the course of or in relation to his employment shall he treated neither as a supply of goods nor a supply of services - Since the applicant is not supplying any services to its employees, in view of Schedule III mentioned above, we are of the opinion that GST is not applicable on the nominal amounts recovered by Applicants from their employees in the subject case. If ITC is available to them, whether it will be restricted to the extent of cost borne by the Applicant? - HELD THAT:- Reliance placed in Hon’ble High court of Bombay in the case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD. [2010 (10) TMI 13 - BOMBAY HIGH COURT] has submitted that ITC is not admissible to Applicant on part of cost borne by employee and thus ITC will be restricted to the extent of cost borne by the Applicant.
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