ITC can be claimed on transport services provided to employees

The Maharashtra bench of the Authority of Advance Ruling has held that input tax credit can be availed on GST charged by a service provider on hiring of a bus or any other motor vehicle having a seating capacity of more than thirteen people for the transportation of employees to & from the workplace. The applicant, Tata Motors, engaged a service provider to provide transportation facilities to its employees in buses for commuting to and from the workplace. They sought an advance ruling to clarify whether input tax credit is applicable on GST charged by the service provider on hiring of a bus having seating capacity of more than thirteen persons for transportation of employees to and from the workplace. They also sought to clarify whether the ITC, if available, will be restricted to the extent of cost borne by the Applicant. The bench held that ITC can be claimed in such a situation provided the services were provided after February 1st 2019 and will be restricted to the extent of cost borne by the Applicant.