ITC on Canteen Services – A Riddle of Semicolons

The Factories Act, 1948 mandates the prescribed factories to maintain a canteen facility. Usually, the factories recover nominal amounts from the employees as expenditure incurred towards canteen facility. As such expense is mandated under the law, the factories, by virtue of a proviso in the blocked credit provision of the CGST Act, tend to avail the ITC on GST charged by service provider on canteen facility.

This entire practice has been a subject matter of litigation ever since the inception of GST. However, it has now been brought back to forefront by the Gujarat AAR in Re: Tata Motors Ltd. [TS-437-AAR(GUJ)-2021-GST]. Against this backdrop, we have penned down an article titled ‘ITC on Canteen Services – A Riddle of Semicolons’, wherein the authors have analysed the ruling in detail, exposing the cracks in the Ruling.

The Article has been attached hereiwith. We hope that reading of the Article would bring an enriching experience to you! Your valuable feedback is always welcome at consult@gstlegal.co.in or updates@gstlegal.co.in.

Disclaimer:

The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.