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

Input tax credit on employee uniforms depends on commercial nexus with output and business ownership of the uniform.
Claiming input tax credit on employee uniforms depends on whether the uniforms are supplied "in the course or furtherance of business." Credit is not allowable if costs are recovered from employees. If the employer bears the cost, ITC may be claimed only where a commercial nexus with the taxpayer's output exists, the uniform is not for personal use, and the uniform is treated as business property; tax authorities may still deny credit, exposing the taxpayer to interest, penalty and litigation.