gardening expenses itc

[Madhavan iyengar]

gardening expenses incurred for garden maintained at factory can ITC be claimed

[Ganeshan Kalyani]

Yes, ITC is available in GST. There is no such concept that the expense should have been incurred in or in relation to manufacturing activity as it was there in Central Excise Law. In GST, ITC of the expense which are used in course or furtherance of business is allowed subject to section 17 of CGST Act.

[KASTURI SETHI]

Pl. go through this order of AAR, ODISHA especially para No.5.3

2018 (18) G.S.T.L. 508 (A.A.R. - GST) = 2018 (10) TMI 748 - AUTHORITY FOR ADVANCE RULING, ODISHAIN RE : NATIONAL ALUMINIUM COMPANY LTD.

[Ganeshan Kalyani]

In the advance ruling cited by Sri Kasturi Sir, the applicant is availing services for plantation both inside the plant area as well as outside the plant area. Some of the contracts are for urban plantation in Koraput and annual plantation in unspecified area. Such services are definitely not in the course of or for furtherance of business. It may be obligatory for the applicant to undertake such plantation, but certainly not a business requirement. Hence, plantation and maintenance of such plantation outside the plant area being for non-business use will not qualify for input tax credit in terms Section 17(1) of CGST and OGST Act. Similarly, services for maintenance of plant and gardens within the residential colony and other public utility created by the applicant will form part of the residential colony and in turn part of the perquisite provided to the employees. Services availed in relation to the plants and garden in the residential colony will not qualify for input tax credit for the reasons discussed in para 5.0. It was also found that the plantation and maintenance of gardens are undertaken within plant area and other business establishments like administrative building and guest houses. Services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishment as mentioned above will qualify for input service credit.

[Madhavan iyengar]

thanks kasturi sir and kalyaniji thanks for the detailed judgement and analysis

so what we are saying is if garden expenses are incurred in the factory premises ie covering the entire area of factory premises which includes reception admin building credit will be eligible ie used in course or furtherance of business.

or there is exception ie if garden is in the entrance area and the admin building credit not eligible.???

[Ganeshan Kalyani]

ITC is eligible if garden is in the entrance area and at the admin building.

AI Summary

Input tax credit for gardening expenses: eligible on business premises, ineligible for residential or public-use gardening. Input tax credit for gardening and plantation services is available when such services are used in the course or furtherance of business and are performed within factory or other business premises (including administrative buildings and guest houses). Gardening and plantation outside plant areas, urban plantations, or services related to residential colonies and employee perquisites are not eligible as they constitute non-business use.