ITC of Canteen Exp.(Food & beverages) _in Factory
Query (Issue) Started By: – Prem Choudhary Dated:- 8-3-2019 Last Reply Date:- 13-1-2020 Goods and Services Tax – GST
Got 6 Replies
GST
Dear Expert
\nAs per amendment in Section 17(5)(b) CGST Act, 2017 as amended by the CGST (Amendment) Act, 2018 w.e.f 1st February, 2019, allows input tax credit in respect of such goods or services or both, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.
\nThe canteen is obligatory in Factories Act 1948 therefore We can take Credit of Canteen bills of food and beverages exp.
\n1. if Canteen is given on contract then Credit of contractor bills can take credit
\n2. if maintained by <\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n law for the time being in force. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n not avilable to them for material consumed . it is correct ? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" ITC of Canteen Exp.(Food & beverages) _in Factory Query (Issue) Started By: – Prem Choudhary Dated:- 8-3-2019 Last Reply Date:- 13-1-2020 Goods and Services Tax – GSTGot 6 RepliesGSTDear Expert As per amendment in Section 17(5)(b) CGST Act, 2017 as amended by the CGST (Amendment) Act, 2018 w.e.f 1st February, 2019, allows input tax credit … Continue reading “ITC of Canteen Exp.(Food & beverages) _in Factory”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-17208","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17208"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17208\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\nHowever, the issue arises when you recover any charges from the employees. In terms of notification no.13\/2018 C.T(R) dated 26th July, 2018 – the rate of tax is 5% with a condition that input tax charged on goods and services used in supplying the service has not been taken. Further such supply would be treated as exempted supply for the purpose of proportionate reversal of ITC under Rule 42 of CGST Rules, 2017.
\nSummary –
\nIf you are not recovering anything from employees (i.e. you don't have any outward canteen supplies) you are eligible for input tax credit under recent CSGT Amendment Act w.e.f. 01.02.2019.
\nIf you are recovering from employees then the ITC will be blocked through virtue of notificat<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n4. If Contractor is reg. as normal dealer, whether ITC is avilable to them(on material consumed ) ? normal rate of canteen will be levyable @5 %.
\n5. in case of catering business, the rate of tax is same @5% in both cases -Normal Registration or Composition scheme ?
\nReply By KASTURI SETHI:
\nThe Reply:
\nDear Querist,
\n Supply of food to employees at subsidized rate means recovery from the pocket of the employees and further, no company runs canteen free of cost. Both the situations have been nicely explained above by the expert.
\n Further, Both the facilities ( supply of food free of charge and at concessional rate) are not obligatory as per Factory Act.
\nReply By Manali Daiya:
\nT<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n