ITC for vehicle hire for pickup drop employee

[Harshit Gandhi]

Can we get itc on vehicle hire for pickup drop employee

[Rajagopalan Ranganathan]

Sir,

If you provide the service of pickup and drop of employees free of cost, then the amount spent by you on provision of sudh service will be added to your cost and it can be said the service is used in the course or furtherance of hi your business and you are eligible to avail ITC of gst paid on such service.

If you collect the cost of such pickup and drop from the employees then it will be treated as for personal use of your employees and in view of the provision of Section 17 (5) (b) (iii) ITC of gst paid on for availing such service is not admissible.

[KASTURI SETHI]

I support the views of Sh.Ranganathan, Sir.

[Ganeshan Kalyani]

The factories are generally set up away from City where pick up and drop of employees becomes compulsory. This fact can becomes a valid point to justify the claim of credit.

[Nash Industries I Pvt Ltd]

The amendment has been passed by the Lok Sabha. Once the amendment is through, credit is allowed for pick up and drop facilities provided to the employees.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

The notification is yet to be published by CBIC

[DR.MARIAPPAN GOVINDARAJAN]

The Bill makes input tax credit available for such benefits if the employer is obligated by law to provide these benefits.

AI Summary

Input tax credit on employee transport: allowed when employer provides free transport; disallowed if cost is recovered from employees.
Eligibility of Input Tax Credit on vehicle hire for employee pickup and drop turns on use in the course or furtherance of business: free employer-provided transport constitutes business use and allows GST credit, while cost recovered from employees is treated as personal use and disqualifies credit; a legislative amendment proposing credit where employers are legally obliged to provide such benefits awaits regulatory notification.