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.