Input Tax Credit Denial on Transport Services provided to Workers.

Praveen Nair

Input Tax Credit Denied for Bus Services Transporting Workers Under Section 17(5)(b)(iii) CGST Act 2017 The CESTAT Hyderabad Bench denied the claim for Input Tax Credit on bus services used to transport workers from home to the factory or office. The tribunal argued that while workers' services contribute to manufacturing once they are at the factory, transporting them or providing welfare measures like accommodation does not directly relate to the production of final goods. Section 17(5)(b)(iii) of the CGST Act 2017 supports this view by blocking credit for services like renting motor vehicles, including buses, used to transport passengers. This decision was made in the case involving a company against the Commissioner of Central Tax, Visakhapatnam. (AI Summary)

CESTAT, Hyderabad Bench has denied claiming Input Tax Credit on the Bus Services used for Transportation of Workers from Home to the Factory / Office:

The contention of the Tribunal for rejection was;

Once the workers come into the factory their services are used in relation to the manufacture of final products. But bringing workers to the factory or providing accommodation to them outside the factory or providing any other welfare measures for the workers or their families have no nexus with the manufacture of the final products, although they are welfare measures meant for the general well-being of the workers who manufacture the goods.

Section 17(5)(b)(iii) of CGST Act 2017, block credit supports the view with the inclusion of rent-a-cab, which as per the definition includes; renting of motor cars, motor cabs, maxi cabs, mini buses, buses and all other motor vehicles which are designed to carry passengers, irrespective of its passenger carrying capacity.

Case Law: ANDHRA ORGANICS LTD VERSUS CCT, VISAKHAPATNAM - G.S.T [2018 (8) TMI 314 - CESTAT HYDERABAD]

answers

Page of

to of Results

Sort by

+ Add A New Reply

Page of

to of Results

Contact Us At :

FAQs :

Most Asked Video Tutorials :

Submit Feedback/Suggestion :

Delete Reply

Delete Issue

Articles

Input Tax Credit Denial on Transport Services provided to Workers.

Contact Us At :

FAQs :

Most Asked Video Tutorials :

Submit Feedback/Suggestion :

Print Options

Delete Reply

Delete Issue

Articles

Input Tax Credit Denial on Transport Services provided to Workers.