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ITC not admissible on ambulances purchased for employees benefit: AAR

ITC not admissible on ambulances purchased for employees benefit: AAR
Nipha Exports Pvt Ltd Vs. West Bengal AAR
case no. - 43/wbaar/2018-19  date - 26/02/2019


Fact of the Case

  1. Nipha Exports Pvt. Ltd. Is the applicant and engaged in manufacturing of agricultural machinery, seeks a Ruling on whether input tax credit is admissible on ambulances purchased for the benefit of the employees under legal requirement of the Factories Act, 1948. 
  2. The concerned officer from the revenue has raised no objection to the admission of the application and admitted the said application. 

Decision of the Case

The Authority observed the followings:-
  1. Eligibility for claiming input tax credit under section 16(1) is subject to the provisions of law at the time of occurrence of the taxable event, irrespective of when the claim is made.
  2. Second proviso to section 1 7(5)(b) of the GST Act, as it stands post amendment effective from 01/02/2019, is not applicable to a transaction made in November 2018.
  3. It is evident from above that input tax credit on inward supply of ambulance, being a motor vehicle, is not admissible under Section 1 7(5)(a) of the GST Act.
  4. The exception carved out under Section 17(5)(b)(iii)(A) of the GST Act for services which are obligatory for an employer to provide to its employees under any law for the time being in force is limited only to rent-a-cab, life insurance and health insurance.
  5. Therefore, Input tax credit is not admissible on the ambulance purchased in November 2018, as Section 17(5) of the GST Act, as it stood in the relevant period, blocks any such enjoyment, even
  6. if provisioning of ambulance service to the employees is obligatory under the Factories Act, 1948.
Input tax credit is not admissible on the ambulance purchased in November 2018, as Section 17(5) of the GST Act, as it stood in the relevant period, blocks any such enjoyment, even if provisioning of ambulance service to the employees is obligatory under the Factories Act, 1948.

This Ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act.

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