Input Tax Credit on Guest House Maintenance

Entitlement to take credit of tax paid on various goods and services used for maintenance of applicant’s township, guest house, hospital, horticulture in its ordinary course of business.

Video Explanation by CA Satbir Singh

Held

Guest House Maintenance  : Establishing, maintaining and furnishing guest houses including landscaping by way of gardening or otherwise is neither a perquisite nor a statutory obligation. It is purely for providing accommodation service to guests including employees on tour. This is in fact a business requirement to maintain such facilities and accordingly the applicant is entitled to input tax credit of tax paid on inward supply of input and input services for maintenance of guest house, transit house, and training hostels, but excluding food and beverages provided in such establishments.

Hospitals Maintenance :Establishment of hospitals and maintenance thereof may be for discharging the statutory obligation under ESI Act by employer, but dispensing medical service to employees and others is a supply of service by employer (applicant). Such service being nil rated will fall under exempt supplies. Consequently, inputs and input services received by applicant for dispensing exempt service will not qualify for input tax credit in terms of section 17 (2).

Inward supplies for Residential colony : Inward supplies received by way of management, repair, renovation, alteration or maintenance service or goods received for furnishing residential colony shall not qualify for input tax credit in terms of section 17 (2). Services which are being availed clearly in relation to residential colony shall not qualify for input tax credit.

Inward supplies for Residential colony and Plant: On the other hand services received partly in relation to residential colony and partly in relation to the plant, proportionate ITC to extent relatable to the plant are available whereas services availed in relation to the residential colony shall not qualify for input tax credit in terms of section 17(2)

AUTHORITY FOR ADVANCE RULINGS, ODISHA

National Aluminium Company Ltd., In re

ORDER NO. 02/ODISHA-AAR/2018-19

SEPTEMBER  28, 2018

P.K. Sahu, Adv. for the Applicant.

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