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2021 (12) TMI 214 - AAR - GSTInput Tax Credit - GST charged by service provider on hiring of bus, having seating capacity of more than thirteen person for transportation of employees to & from workplace - amount recovered by the Applicant from employees for usage of bus transportation facility - restriction of credit to the extent of cost borne by the Applicant (employer) - HELD THAT:- Section 17 of the CGST Act, 2017 provides for apportionment of credit and blocked credit. It is pertinent to have a look at the relevant legal provisions under Section 17(5) of the CGST Act. The 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. In the subject case, since the applicant has specifically submitted 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 lax Credit in this case. However we would like to make it very clear that if the motor vehicle hired by them does not have an approved seating capacity of more than thirteen persons (including the driver), then in that case the applicant will not be eligible for Input Tax Credit. 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:- 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 be 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, it is held that GST is not applicable on the nominal amounts recovered by Applicants from their employees in the subject case. Restriction of ITC to the extent of cost borne by the Applicant - HELD THAT:- The issue has already been settled by the Hon'ble High Court of Bombay in the case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [2010 (10) TMI 13 - BOMBAY HIGH COURT] wherein the Hon'ble High Court has held that although the assessee is entitled for input service credit for the manufacturing of final product but the amount reimbursed by the employees by way of contribution is not entitled for input service credit.
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