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Input tax credit cannot be availed on GST paid for employees cabs

  • Jun 22, 2020 | Divita S Gupta

Input tax credit cannot be availed on GST paid for employees cabs

The Himachal Pradesh bench of the Appellate Authority for Advance Ruling has held that input tax credit for GST paid on hiring commercial vehicles for transportation of employees cannot be claimed by companies if providing such a service is not obligatory under any law. An application was filed by All India Radio seeking an advance ruling to understand if ITC would be available on taxi hiring services for pickup and drop-off of staff, including ladies and handicapped employees. Since the applicant did not cite any law under which the service of providing transportation facility to its employees is obligatory, ITC cannot be claimed under provisions of GST law. Experts reckon this ruling is likely to affect the perquisite value of benefits given to the workforce at an organisation.

Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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