ITC on vendor invoices received towards food served in canteen

In re KSH Automotive Pvt (GST AAR Andhra Pradesh)

Introduction: The GST landscape continues to evolve, bringing about new challenges and questions for businesses. One such question pertains to the eligibility of Input Tax Credit (ITC) for food served in canteens. In a recent ruling by the Authority for Advance Ruling (AAR) in Andhra Pradesh, the question of whether a business can claim ITC on vendor invoices received towards food served in the canteen was addressed.

Detailed Analysis: The applicant, M/s KSH Automotive Pvt Ltd, engaged in auto parts manufacturing, sought clarification on whether they could claim ITC on vendor invoices for food served in their factory canteen. To analyze this situation, let’s break down the key factors:

1. Mandatory Canteen Provision: As per the Factories Act, 1948 and Andhra Pradesh Factory Rules, factories with over 250 workers are required to provide a canteen facility. The applicant’s factory fulfilled this criterion, making the provision of canteen services obligatory.

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