GST UPDATEZ ON 22-10-2024
The AAR, Tamil Nadu in the case of M/s. CMA CGM Global Business Services (India) (P.) Ltd., ruled that an Assessee is eligible to avail input services in respect of leasing/ renting/ hiring of motor vehicles of motor vehicles to provide transportation facility to ensure safety and security of women employees as per Tamil Nadu Shops and Establishments Act, 1947.
Further, Input Tax Credit (“ITC”) shall be available to the taxpayer only on the tax paid on services or renting, leasing or hiring of motor vehicles for providing transport facilities to women employees alone who are arriving or leaving the workplace between 8 pm to 6 am.
M/s. CMA CGM Global Business Services (India) (P.) Ltd. (“the Applicant”) operated in the Information Technology Enabled Services (“ITes”) sector.
It was a captive service provider which was engaged in providing back-office support services to its parent company located outside India.
As per the Tamil Nadu Shops and Establishment, 1947, it is mandatory for the Applicant to provide a transportation facility for the women employees working in the shifts and provide adequate protection of safety for women employees.
Therefore, in compliance with the same, the Applicant procured services of renting of motor vehicle for women employees working beyond 8.00 PM. Also, the Applicant has the policy where women employees have to login from 9 pm till 6 am or if leaving after 8pm till 6 am to use cab facility, this facility is provided irrespective of login/logout timing.
The question was –
“Whether the Assessee can avail ITC on the Input Services for leasing/ renting motor vehicles for women’s safety?”
It was observed that CBIC vide Circular 172/04/2022 dated July 06, 2022 issued by the wherein it was clarified that Section 17(5)(b)(iii) is applicable to whole of Section 17(5)(b) of the CGST Act.
Further, as per the provisions of Tamil Nadu Shops and Establishment Act, 1947, it is obligatory on the part of the Applicant to provide transport facilities to women employees working beyond 8 pm.
Hence, the Applicant is eligible to avail input services in respect of leasing/renting/hiring of women employees subject to satisfying conditions of eligibility provided under Section 16 of the CGST Act.
Well…….
Though Rent a cab is generally blocked credit in terms of Section 17(5), ITC in respect of such goods and services or both shall be available, where it is obligatory for an employer to provide the same to its employees which has been done in terms of mandatory obligation as per the Notification (G.O. Ms No. 60, Labour and Employment (K2) dated May 28, 2019 by the Government of Tamil Nadu.
R.SRIVATSAN, IRS,
NACIN, Chennai
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