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

Taxpayer cannot claim Input Tax Credit on cab services under Section 17(5)(B) CGST Act restrictions A taxpayer inquired about claiming Input Tax Credit on cab services for two scenarios: transportation to attend personal hearings with tax officers and providing drop-home facilities for employees working late hours. Multiple tax experts confirmed that ITC on cab services is blocked under Section 17(5)(B) of the CGST Act. One expert clarified that credit would only be eligible if such expenses are mandatory for employers under applicable law. Another expert emphasized that both the 'mandatory nature' element and 'usage in same business line' element are absent in these scenarios, reinforcing the ITC restriction. All responses unanimously concluded that Input Tax Credit cannot be claimed for the mentioned cab service expenses due to statutory restrictions under GST law.