GST Credit on -COST allocation to Other unit -head of ineligible Credit items

[Prem Choudhary]

Dear Expert

please advice on input tax credit is eligibility , One Manufaturing Company has 5 manufaturing units in different states and all unit has maintaining separate books and return in GST . And every month each unit is raising tax invoice on other units for cost incurred / facilities provided to employee of other units by using "SAC -998599 Other Support Service". However in Cost allocation invoice the component of following cost is also included :-

1. Taxi Hire charges:- ( providing unit has paid GST under RCM)
2. Fooding charges
3. Hotel bills
4. Medical support etc

please advice other unit can eligible of ITC of all components under Other Support Service.

AI Summary

Input tax credit eligibility on inter-unit cost allocations often denied for service components like taxi, food and medical.
Recipient units generally cannot claim ITC on inter-unit cost allocations invoiced as Other Support Services where components include taxi hire (GST paid by provider under reverse charge), fooding and medical support; hotel bills may be allowable when for official functions. An amendment permits ITC if an employer is legally obliged to provide the service, but that exception does not apply where no statutory obligation exists. A minority view supports eligibility on the basis that the supply is Other Support Services rather than a rent-a-car service.