Outdoor catering credit is barred after the CENVAT amendment, despite canteen obligations or employer-funded service.

Outdoor catering service is excluded from input service credit under the amended Rule 2(1) of the CENVAT Credit Rules, 2004 with effect from 01.04.2011 when it is used primarily for personal use or consumption of employees. The post-amendment inclusive definition is controlled by the express exclusion, so business linkage, factory canteen requirements, or employer bearing of the cost do not override the statutory bar. The legislative purpose reflected in the Budget Speech and clarificatory communication supports a narrower credit regime. Accordingly, outdoor catering service is not eligible for input service credit after 01.04.2011.

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Issues: Whether outdoor catering service is eligible for input service credit after the amendment to Rule 2(1) of the CENVAT Credit Rules, 2004 with effect from 01.04.2011.

Analysis: The amended definition of input service continued the main inclusive formulation but introduced an express exclusion clause, and outdoor catering service was specifically covered by that exclusion when used primarily for personal use or consumption of employees. The post-amendment text had to be read in light of the legislative purpose reflected in the Budget Speech and the clarificatory communication issued by the tax administration, both of which indicated an intention to rationalise and narrow disputed credits. Once a service is expressly excluded, its treatment as business-related expenditure or its linkage with factory canteen obligations does not override the statutory exclusion. The fact that the canteen may be maintained under labour or factory law, or that the cost is borne by the employer, does not by itself revive eligibility for credit under the amended rule.

Conclusion: Outdoor catering service is not eligible for input service credit after 01.04.2011.

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