- Dismissal of Appeal: The AAAR, Gujarat dismissed the Department’s appeal, upholding the AAR’s ruling that Emcure Pharmaceuticals is not liable to pay GST on free bus transportation provided to employees, affirming the earlier decision from April 12, 2022.
- Free Transportation as Perquisite: The ruling clarified that the free bus transportation service offered to employees is a perquisite under the employment agreement, which is not subject to GST as it is considered a service provided by the employee to the employer in relation to their employment.
- ITC on Motor Vehicle Expenses: The AAAR ruled that Emcure is eligible to claim Input Tax Credit (ITC) on GST paid for hiring a bus with a seating capacity of more than 13 persons, as this expenditure is not blocked under Section 17(5)(b)(i) of the CGST Act.
- Clarification from CBIC: The ruling referenced CBIC Circular No. 172/4/2022-GST, which states that perquisites provided by an employer to employees, as per contractual agreements, are not subject to GST.
- Relevant Legal Provisions: The decision was based on the interpretation of the CGST Act, specifically the treatment of employee services and the conditions under which ITC can be claimed, reinforcing that services rendered in the context of employment do not constitute taxable supplies.
Source A2ztaxcorp
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