TaxTMI 
TaxTMI 
2019 (8) TMI 1282
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....called the Applicant) is engaged in supply of port services and incidental supply of goods like disposal of discarded assets. They are registered under GST with GSTIN 33AAALC0025B1Z9. They have preferred Applications seeking Advance Ruling on the following questions: 1. Whether the applicant is entitled to take credit of input tax charged on the inward supply of medicines which are used or intended to be used in the course or furtherance of business of the applicant subject to fulfillment of (1) such conditions and restrictions as may be prescribed in CGST Rules 2017 particularly in rules 36 to 45(both inclusive), (2) such conditions stipulated in sub sections (2) to (4) of section 16, (3) in the manner specified in section 49 and on the presumption that these queried inward supply of medicines does not fall under the blocked credit under section 17(5)(e), section 17(5)(h) and section 17(5)(i) of the Act? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted the copy of Challans evidencing payment of Application Fees of Rs. 5, 000 per application - each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. The appli....
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....d for personal consumption" since the cost of these medicines are borne by the applicant as a part of service contract with its employees and pensioners as held in the case of Hindusthan Coca Cola Beverages Pvt Ltd vs CCE as reported in [2015] 56 taxmann.com 378 (Mumbai CESTAT) = 2014 (12) TMI 596 - CESTAT MUMBAI. The medicines are used in the course or furtherance of business as per Section 16 and are not blocked credit under Section 17(5)(g), consequently the applicant is eligible for ITC on inward supply of medicines under Section 16(1) subject to fulfillment of Rules 36 to 45 of CGST Rules. The applicant submitted copies of the two notifications mentioned in Para 3 above. 4.1 The Applicant was granted personal hearing on 24.09.2018 in respect of all the above applications ARA 28 dated 20.07.2018. The applicant represented through authorized representative. The submissions during the hearing are as under: The learned representative stated that medicines are being given to the employees free of cost and the medicinal equipment is used to render health benefits to the employee which is part of the package to the employee. They stated that they will submit a sample c....
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....ensioners and family pensioners are entitled for treatment on payment of onetime contribution i.e. last basic pay of the retiring month. Medicines are supplied free of cost at the pharmacy and in case not available they are purchased and distributed free of cost to the patients. Free food to the patients is supplied from hospital kitchen. Employees/ pensioners are entitled to medical reimbursement at CGHS rates subject to production of all original case records in emergency cases in case of inpatients. Employees can recommend outsider as patients but the payment for treatments is deducted from salary of the employee who recommended. In case patients are critical can be referred to empanelled hospitals. In such a case, the bills are received from the empanelled hospital and paid by the applicant after due verification. 6. The remarks of the State Jurisdictional Officer on the questions raised by the applicant in the ARA application are detailed below: The activity of the applicant is providing port services and sale of disposal of discarded assets. Providing medical cover to their employees and pensioners are not part of their business activity and providing medical faci....
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....e expenditure for providing the medical benefit will be met from the Chennai Port Trust Employees Welfare Fund to this these lump sum amounts are paid into. 8.1 Before determining whether the applicant is eligible for Input Tax credit for the inward supply of medicines, the relevant statutory provisions are referred to as under: Section 16(1) to (4) of CGST Act 2017 & TNGST Act 2017 provides the "Eligibility and conditions for taking Input tax credit" of is as follows: 16 (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. Section 17 (5) of the Act, which blocks/ restricts certain credits, states as under: (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- ....