ITC will not be available on cab services to employees which is not obligatory under Law

THE AUTHORITY FOR ADVANCE RULING

The Questions and Ruling as follows :

The Applicant sought Advance Ruling on following questions:

1. Applicable GST rate on renting of motor cab service.

2. Whether ITC will be available to the recepient on the renting of motor cab service for transporation of employees?

Ruling

1. The applicable rate of tax on renting of Cabs as per Notification No. 20/2017 dated 22.08.2017 is 5% with limited ITC (of input service in the same line of business) and 12% with full ITC.

2. If the facility provided by a taxpayer for transportation of employees is not obligatory under any law, for the time being in force then no ITC will be available to such a taxpayer. The applicant will however be eligible to claim ITC for the service supplied at 12% GST Rate if the conditions laid down in the second proviso to section 17(5)b are satisfied.