ITC available on GST: Hiring bus for Employees transportation

ITC available on GST: Hiring bus for Employees transportation

The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that Input Tax Credit (ITC) available on GST charged on hiring bus for transportation of employees to and from the workplace.

The applicant, Dr. Willmar Schwabe (I) Private Limited manufactures and supplies Homeopathic Medicines and related products in India. The applicant has entered into an arrangement with 'Bhati Motors.'

Pursuant to which the Applicant is availing bus hiring services, on contract basis, for employees' transportation to & from the workplace (Noida). The approved seating capacity in such buses can be more than 13 people and in some, even less than that. The buses which has more than 13 passengers seating capacity hired by the Applicant are non-air-conditioned.

M/s Bhati Motors is having the contract carriage permit issued by the relevant regulatory authorities in respect of buses deployed for employee transportation service. Further, M/s Bhati Motors is charging GST on supplies made to the Applicant.

The applicant has sought the advance ruling on the issues whether ITC is available to the Applicant on GST charged by service provider on hiring of bus, having seating capacity of more than 13 passengers for employees transportation to and from workplace, whether GST is applicable on amount recovered by the Applicant from employees for usage of bus transportation facility, and ITC is available.

The Coram of Vivek Arya and Abhishek Chauhan ruled that ITC is available to the Applicant on GST charged by service provider on hiring of bus, having seating capacity of more than 13 passengers for transportation of employees to and from workplace only after 1 Feb, 2019. The GST is not applicable on the amount recovered by the applicant from employees for usage of bus transportation facility.