2019 (2) TMI 1604 - AAR - GST

Input tax Credit - ambulances purchased for the benefit of the employees under legal requirement of the Factories Act, 1948 - Second Proviso to Section 17(5)(b) of the GST Act - Held that - Input tax credit on inward supply of ambulance, being a motor vehicle, is not admissible under Section 17(5)(a) of the GST Act. The exception carved out under Section 17(5)(b)(iii)(A) of the GST Act for services which are obligatory for an employer to provide to its employees under any law for the time being in force is limited only to rent-a-cab, life insurance and health insurance - Credit not available.

Summary

Issues:
1. Admissibility of the Application
2. Submissions of the Applicant

Admissibility of the Application:
The Applicant, a manufacturer of agricultural machinery, sought a ruling on the admissibility of input tax credit on ambulances purchased for employees under the Factories Act, 1948. The application was admitted as it met the criteria under Section 97(2)(d) of the GST Act. The question raised was not previously decided or pending before any authority, and no objections were raised by the revenue officer.

Submissions of the Applicant:
The Applicant argued that the input tax paid on the ambulance purchase is eligible for credit under the Second Proviso to Section 17(5)(b) of the GST Act, effective from 01/02/2019, as it was bought for the benefit of employees as required by law.

Observation & Findings of the Authority:
The Authority noted that the ambulance was purchased in November 2018, before the amendment to Section 17(5)(b) came into effect on 01/02/2019. The eligibility for input tax credit is determined by the law at the time of the taxable event, not when the claim is made. As per the provisions of Section 17(5) of the GST Act before the amendment, input tax credit on motor vehicles, including ambulances, was not admissible. The exception for services obligatory under law only applied to rent-a-cab, life insurance, and health insurance, not ambulances.

Ruling:
The Authority ruled that input tax credit is not admissible on the ambulance purchased in November 2018, as per Section 17(5) of the GST Act applicable at that time. The ruling remains valid unless declared void under the provisions of the GST Act.