Query on Availing ITC for Cab Services

[Ramanathan Seshan]

Dear Experts,

I would like to know whether Input Tax Credit (ITC) can be claimed on the following cab service expenses:

1. Cab used for attending a personal hearing with the tax officer.

2. Cab facility provided to employees who stay late after office hours for dropping them home.

Regards,

S Ram

[Sadanand Bulbule]

 ITC on cab services are blocked under Section 17[5][B] of the CGST Act.

[Ramanathan Seshan]

Thanks sir

[KASTURI SETHI]

Yes. ITC is blocked.

[Ramanathan Seshan]

Thanks sir

[Ganeshan Kalyani]

Credit not eligible, unless such expenses are mandatory for an employer to provide it to his employee under any law for the time being in force.

[Ramanathan Seshan]

Thanks sir

[KASTURI SETHI]

Yes, Sir. The element of "mandatory nature" is absent.

The element of ""usage in the Same business line" is also absent.

[Ramanathan Seshan]

Thanks sir

AI Summary

Input Tax Credit on cab services blocked under Section 17(5)(b); only allowed when employer provision is legally mandatory. ITC on cab services is blocked under Section 17(5)(b); cab use for a personal hearing is ineligible. Employee drop-home cab services are likewise ineligible unless the employer is legally required to provide such transport, in which case the mandatory nature could permit credit.