ITC on canteen

[Shankar Nayakar]

Dear sir,

we are manufacturing co. and having canteen facility also in co. premises.

third party is cooking here and raise invoice with GST to us., we are paying him with GST.

however company is charging nominal fee from employees.

in this scenario, ITC is eligible or not?

AI Summary

Manufacturing company unlikely to claim GST Input Tax Credit for canteen services per Section 17(5) of CGST Act, 2017. A manufacturing company with an on-site canteen operated by a third-party caterer inquires about the eligibility of Input Tax Credit (ITC) under GST. The caterer charges GST, and the company recovers a nominal fee from employees. Experts largely agree that ITC is not available for outdoor catering services as per Section 17(5) of the CGST Act, 2017, which excludes such services unless they are used for making outward taxable supplies of the same category. Some experts suggest that if the service is considered an outward supply, ITC might be claimable, but overall, the consensus is that ITC is not permissible.