TaxTMI 
TaxTMI 
2021 (12) TMI 214
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.... 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. The applicant has submitted following facts- (1) The applicant is engaged in manufacture and supply of Homeopathic Medicines and related products in India. (2) The Applicant has entered into an arrangement with 'Bhati Motors', pursuant to which the Applicant is availing bus hiring services, on contract basis, for transportation of its employees, to & from the workplace (Noida). (3) The approved seating capacity in such buses can be more than thirteen persons and, in some cases, even less than thirteen persons. The buses hired by the Applicant, where the seating capacity is more than 13 passengers, are non-air conditioned. M/s Bhati Motors is having the contract carriage permit issued by the relevant regulatory authorities in respect of buses deployed for employee transportation service. Further, M/s. Bhati Motors is charging GST on supplies made to the Applicant. (4) The Applicant recovers some amount from its employees towards provision of such facility ....
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....e workplace (Noida), are used or intended to be used in the course or furtherance of Applicant's business in terms of Section 16 of CGST Act and ITC, to that extent, shall be allowed to the Applicant. In this regard, reliance can be placed on following decisions - a) Commissioner of Central Excise v. M/s. Federal Mogul Goetze (India) Ltd, 2011 (9) TMI 120 - Punjab and Haryana High Court; b) Commissioner of Central Excise, Bangalore-III, Commissionerate v. Stanzen Toyotetsu India (P.) LTD, 2011 (4) TMI 201 - Karnataka High Court; (8) Section 17(5)(a) restricts ITC in respect of motor vehicle having seating capacity of not more than 13 persons (including driver). In respect of the motor vehicle having sitting capacity of more than 13 passenger, there is no restriction of ITC under Section 17(5). ITC of motor vehicle as well as of services of renting, leasing or hiring of that motor vehicle will be available to the taxable person subject to fulfilment of conditions mentioned under Section 16 of CGST Act. (9) The Applicant has made available certain facilities to its employees like transportation facilities for commuting to and from the workplace via buses a....
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.... have gone through the submissions made by the applicant and have examined the explanation submitted by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2)(d) and 97(2)(e) of the CGST Act 2017 being matter related to admissibility of input tax credit and determination of the liability to pay tax. We therefore, admit the application for consideration on merits. 9. We observe that the applicant has sought advance ruling on the issue- a) 'Whether ITC is available to the Applicant on GST charged by service provider on hiring of bus, having seating capacity of more than thirteen person for transportation of employees to & from workplace. b) Whether GST is applicable on amount recovered by the Applicant from employees for usage of bus transportation facility. c) If ITC is available as per (a), whether it will be restricted to the extent of cost borne by the Applicant (employer). 10. Section 16 of the CGST Act, 2017 is in respect of eligibility and conditions for taking input tax credit which is reproduced as under- Section 16. (1) Every registered person shall, subject to such conditio....
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....th tax payable thereon. (3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961 (43 of 1961.), the input tax credit on the said tax component shall not be allowed. (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date off furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. 11. We find that Section 17 of the CGST Act, 2017 provides for apportionment of credit and blocked credit. It is pertinent to have a look at the relevant legal provisions under Section 17(5) of the CGST Act. The Section 17 (5) has been amended by CGST (Amendment) Act. 2018 (No. 31 of 2018) dated 29.08.2018 made effective from 01.02.2019 vide Notification No. 02/2019 - C.T.- 2019 dated 29.01.2019. The same are given below: "(5) Notwithstanding anything contained ....
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....and (ii) (iii) travel benefits extended to employees on vacation such as leave or home travel concession: Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. " 12. Prior to 01.02.2019, Section 17 of CGST Act, 2017 read as under:- Section 17: (5) Notwithstanding anything contained in subsection (1) of section 16 and subsection (1) of section IS, input tax credit shall not be available in respect of the following, namely:- (a) rotor vehicles and other conveyances except when they are used (i) for making the following taxable supplies, namely: (A) further supply of such vehicles or conveyances ; or (B) transportation of passengers: or (C) imparting training on driving, flying, navigating such vehicles or conveyances; (ii) for transportation of goods: (b) the following supply of goods or services or both (i) food and beverages, outdoor catering, beauty treatment, healthy services, cosmetic and plastic surgery except where....
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....is business. 17. Therefore in the subject case, since the applicant has specifically submitted that they are using motor vehicles having approved seating capacity of more than thirteen persons (including the driver), the applicant shall be eligible for Input lax Credit in this case. However we would like to make it very clear that if the motor vehicle hired by them does not have an approved seating capacity of more than thirteen persons (including the driver), then in that case the applicant will not be eligible for Input Tax Credit. 18. The second question raised by the applicant is whether GST is applicable on nominal amount recovered by Applicants from their employees for usage of employee bus transportation facility in non-air conditioned bus. To answer this question we now refer to Schedule III to the CGST Act which lists activities which shall be treated neither as a supply of goods nor a supply of services. As per clause 1 of the said Schedule-III, services by an employee to the employer in the course of or in relation to his employment shall be treated neither as a supply of goods nor a supply of services. Since the applicant is not supplying any services to its emplo....