TaxTMI 
TaxTMI 
2026 (3) TMI 1298
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....or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. AGS HEALTH PRIVATE LIMITED Door No. 141, 5th Floor, Prince Infocity II, Kottivakkam Village, Rajiv Gandhi Road, Kandanchavadi, Chennai - 600 096 (hereinafter called as the "Applicant") are registered under the GST Act with GSTIN: 33AAICA9905D1ZV. The Applicant operates in Information Technology Enable Services (ITES) sector. They are registered under the Tamil Nadu Shops and Establishment Act 1947. The applicant renders Business Process Outsourcing (BPO) services to their customer base outside India with different time zones necessitates the applicant to operate in various shifts throughout the day. The offi....
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....associate enterprises AGS Health LLC, headquartered in Washington, USA. In India, the applicant has office presence in the State of Tamil Nadu, Andhra Pradesh, Telangana, Rajasthan, Karnataka and Gujarat. The applicant operates as Non-Software Technology Part of India (Non-STPI) in the state of Tamil Nadu. 3.3 The nature of services being rendered to the customer base outside India with different time zones necessitates the applicant to operate in various shifts throughout the day. The office hours of the applicant predominantly extend beyond 8.00 P.M. 3.4 The applicant is registered under the Tamil Nadu Shops and Establishment Act, 1947 for all the places of business located in Tamil Nadu. As per the Tamil Nadu Shops and Establishment Act, 1947 read with the relevant rules and notifications prescribed therein, it is mandatory for the applicant to provide transportation facility for women employees working in shifts and provide for adequate protection of safety for women employees (hereinafter referred to as "said statutory requirement"). The relevant extract of the notification (G.O. Ms. No. 61, Labour Welfare and Skill Development Department (K2) dated 02.06.2022) issued by....
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....g with the rules and regulations of Tamil Nadu Shops and Establishment Act, 1947 mentioned above, wherein it is necessary to provide transportation facility with adequate safety for women employees working in shifts. 3.7 The Applicant states that no recovery of cost is made by the applicant from the employees for transportation facilities provided to them. The applicant has been receiving services of leasing/hiring/renting of motor vehicles for transportation of employees and paid tax on the same, either on reverse charge mechanism (RCM) basis or on payment of consideration to suppliers (where the supplier has raised invoice on forward charge basis). 3.8 With effect from 01.02.2019, a proviso after Section 17(5)(b)(i) of CGST Act, 2017 and TNGST Act, 2017 was inserted which stated that "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". The applicant had adopted a position to not avail ITC for tax paid on services of leasing/hiring/renting of motor vehicles for transportation of employees out of abundant caution. The applicant ....
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.... being in force. 4.3 The Applicant stated that prior to the amendment, ITC on rent a cab, life insurance, health insurance was blocked except when it is obligatory for an employer to provide the said services to employees under any law for the time being in force or when it is used for rendering outward taxable supply of same category of goods or services. The Applicant further stated that after the said amendment, the term "rent a cab" was removed from Section 17 of CGST Act, 2017 and substituted by the term "leasing, renting or hiring of motor vehicles, vessels or aircrafts: in Section 17(5)(b) of the CGST Act,2017. Furthermore, a separate proviso was introduced at the end of Section 17(5)(b) of CGST Act 2017. 4.4 Prior to the amendment, the applicant states that they have not availed ITC on hiring of motor vehicles. The reason for the same being the ambiguity as to what would constitute "Rent a Cab". The term "Rent a cab" is not specifically defined anywhere in the Act. The applicant had a genuine doubt as to whether the service of hiring of means of transport received by the applicant would fall under the ambit of "Rent a cab". Further, due to lack of clarity regarding th....
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....dras High Court], M/s. Troika Pharmaceuticals Limited [2022 (9) TMI 200 - AAR, Gujarat], M/s. Access Healthcare Services (P) Ltd., [2023 (8) TMI 1205 - AAR, Tamil Nadu], M/s. CMA CGM Global Business Services India (P) Ltd., Order No.15/ARA/2024 dated 15.07.2025 of AAR, Tamil Nadu, etc. 4.8 The applicant states that no recovery of cost has been made by the applicant for provision of the said facility. They further stated that ITC was not availed on leasing/renting/hiring of motor vehicles for transportation of women employees prior to the introduction of proviso to Section 17(5)(b) of the CGST Act, 2017, and that they believe that ITC should be permitted to be availed for the period beginning from the date of introduction of proviso to 17(5)(b) of the Act, ibid, even though the time limit for availing ITC may have elapsed as the applicant would be at a substantial loss because GST paid on aforementioned services is a sizable amount. 4.9 The applicant states that the issuance of separate clarification through Circular no. 172/04/2022-GST not only provided clarity on the eligibility of ITC in such cases, but also made it clear that the said credit would be eligible from the time....
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....ses, and they further added that they have an in-built 'App' to monitor the day-to-day transportation requirements of the company. 5.4 As undertaken by them, the applicant vide their letter dated 21.01.2026 furnished additional submission, wherein they stated the following :- • "We procure procures services of leasing/renting/hiring of motor vehicles for passenger transportation and provide the same to our employees working in shifts in compliance with the legal mandate under Tamil Nadu Shops and Establishment Act, 1947 read in connection with notification G.O Ms No.61, Labour Welfare and Skill Development Department (K2) dated 02 June 2022. • As per the legal mandate, transport arrangement must be provided by employer to women employees who work in shifts. Further, the employer must provide adequate protection of their dignity, honour and safety. • Hence, we follow a practice that in no circumstances shall a women employee working in night shift be the last person to be dropped and a male employee shall accompany women employees at all times till the point of drop. In the absence of male employees, adequate security escort will be provided....
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....ent (K2) dated 02 June 2022) issued by the Government of Tamil Nadu were reproduced as below:- "(6) Women employees shall not be required to work beyond 8.00 p.m. on any day in normal. Provided that the employer after obtaining written consent of the women employees shall allow them to work between 8.00 pm and 6.00 am, subject to providing adequate protection of their dignity, honour and safety." "(7) Transport arrangements shall be provided to the women employee who works in shifts. A notice to this effect shall be exhibited at the main entrance of the establishment indicating the availability of transport." 6.5 In compliance with the said mandate, the Applicant is procuring services of leasing / renting / hiring of motor vehicles for passenger transportation and provides the same to its women employees working in shifts. Accordingly, the Applicant requests for a ruling to have clarity on the eligibility of ITC in respect of GST paid on above mentioned input services availed by the applicant. The applicant states that no recovery of cost has been made by the applicant for provision of the said facility. They further stated that ITC was not availed on ....
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.... such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply; (ii) membership of a club, health and fitness centre; and (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." 6.7 On perusal of the above provisions of Section 17(5) of the CGST Act, 2017 we find that the Input tax credit on services of leasing, renting or hiring of motor vehicles shall not be available as the same falls under the category of blocked credit. However, the proviso to the said sub-section provides 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. 6.8 Further it is seen that CBIC vide circular No. 172/04/2022 dated 0....
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....ication stands extended for a period of three years with effect from 05.06.2025 vide Notification [G.O. (D). No.207, Labour Welfare and Skill Development Department (K2), 8th May 2025]. The paras relevant to the instant case, are reproduced below for ease of reference; "(6) Women employees shall not be required to work beyond 8.00 P.M. on any day in normal circumstances: Provided that the employer after obtaining written consent of the women employees shall allow them to work between 8.00 P.M. and 6.00 A.M. subject to providing adequate protection of their dignity, honour and safety. (7) Transport arrangements shall be provided to the employee who works in shifts. A notice to this effect shall be exhibited at the main entrance of the establishment indicating the availability of transport. 6.10 Accordingly, once it has become obligatory on the part of the taxpayer to extend such facilities, as stipulated under the Notification issued by the Government of Tamil Nadu dated 02.06.2022, we find that as clarified under the CBIC Circular dated 22.07.2022, the applicant is eligible to avail credit of the GST paid on input Services in respect of leasing/renting....
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....ilment of such ITC shall be subject to satisfying and fulfilling the eligibility and conditions as stipulated under Section 16 of the CGST Act, 2017. 6.13 We find that the applicant has made the following submissions with regard to their claim that the ITC should be permitted to be availed for the prior period as well. They contend that the issuance of separate clarification through Circular no. 172/04/2022-GST not only provided clarity on the eligibility of ITC in such cases, but also made it clear that the said credit would be eligible from the time of introduction of said proviso, because the ambiguity that existed earlier got removed altogether only after issuance of the said circular. Accordingly, the applicant contended that the benefit of ITC cannot be denied on procedural grounds without any fault on the part of the applicant, and to this effect, they relied on the judgment pronounced by the Hon'ble Supreme Court in the case of M/s. Auriay Chamber of Commerce [1986 (25) E.L.T 867 - Supreme Court]. In view of the above, the applicant is of the opinion that GST paid on transportation facility with adequate safety measures provided to employees working in shifts would be el....