Can ITC avail on uniform to employees by the company

[RameshBabu Kari]

Dear Experts,

Company providing the uniform to their employees and for that company made contract with tailor and tailor is already registered under gst and he billed the company with gst. In such case, can company avail the ITC ?

In this case, any differences will be there if uniform expenses are all borne by the company & does company eligible for the ITC ? or if such expenses recovered from the employee ?

AI Summary

Debate on ITC Eligibility for Employee Uniforms: Essential for Business or Employee Welfare? Rule Interpretation Varies. A company inquired about the eligibility of Input Tax Credit (ITC) under GST for expenses incurred on employee uniforms, contracted through a GST-registered tailor. Various experts debated whether ITC could be claimed, focusing on whether the uniforms are used 'in the course or furtherance of business.' Some argued ITC is not available if the cost is recovered from employees or if uniforms are considered employee welfare. Others suggested ITC might be claimable if the uniforms are essential for business identity and not for personal use, but warned of potential litigation risks.