Outdoor catering service

[yateen vyas]

Respected Experts,

We have manufacturing unit and we are running our canteen by a outdoor caterer.AS we are not able to take credit of outdoor catering service,I wan your input on below suggestion if we can use-

1. Can we purchase all material used in canteen in the name of our unit and only service portion is done by outdoor caterer.

2. If we purchase all material than can we able to take credit on canteen material purchase or is it fall under category of furtherance of business.

AI Summary

Manufacturing unit faces challenges claiming ITC for canteen materials due to Section 17(5)(b) GST Act restrictions. An individual sought advice on whether a manufacturing unit could claim input tax credit (ITC) for materials used in a canteen operated by an outdoor caterer. They proposed purchasing materials in the unit's name and having the caterer provide services only. Experts responded that claiming ITC in this scenario is challenging. One expert noted that ITC is generally allowed for canteens in company premises, but others highlighted restrictions under Section 17(5)(b) of the GST Act, which limits ITC on food and catering services, even if expenses are business-related and canteen maintenance is mandatory under the Factories Act 1948.