In re Assistant Commissioner (M/s. Emcure Pharmaceuticals Ltd) (GST AAAR Gujarat)
The AAAR, Gujarat in the matter of M/s. Emcure Pharmaceuticals Ltd. (Advance Ruling (Appeal) No. GUJ/GAAAR/APPEAL/2024/09 dated December 30, 2024, dismissed the appeal filed by the Department and reaffirmed the ruling passed by AAR, Gujarat in the case of In Re: M/s. Emcure Pharmaceuticals Ltd. [GUJ/GAAR/R/2022/22 dated April 12, 2022], thereby ruling that Applicant is not liable to pay GST on free bus transportation facility provided to its employees. Further, it was ruled that the ITC on motor vehicle for transportation of person having approved seating capacity of more than 13 persons, not being blocked under Section 17(5)(b)(i) of the CGST Act, and thereby, could be availed by the Applicant.
Facts:
The Assistant Commissionerate, CGST, Ahmedabad North Commissionerate, (“the Appellant”) has filed an appeal before AAAR, Gujarat, against the ruling passed by AAR, Gujarat (“GAAR”) in the case of In Re: M/s. Emcure Pharmaceuticals Ltd. [GUJ/GAAR/R/2022/22 dated April 12, 2022] (“the Respondent”) wherein it was held that:
- GST at the hand of M/s. Emcure is not leviable on the amount representing the employees’ portion of canteen charges which is collected by M/s. Emcure and paid to the canteen service provider.
- GST at the hand of M/s. Emcure is not leviable on free bus transportation facility provided to its employees.
- ITC on GST paid on canteen facility is blocked credit under Section 17(5)(b)(i) of the CGST Act and inadmissible to M/s. Emcure.
- ITC on GST paid on hiring of Bus, having approved seating capacity of more than thirteen persons used for transportation of passengers is admissible.
The Appellant put forth the following points in the appeal filed against the ruling passed:
- GAAR granted erroneous benefit of exemption of GST on free bus transport provided by the Respondent.
- GAAR on one hand held that the GST is not leviable on the Respondent on free bus transportation while on the other hand it was held that ITC on GST paid on hiring bus is admissible.
- Placing reliance upon Section 16(2)(c) of the CGST Act, ITC is not entitled unless the tax charged in respect of such supply has already been paid.
- ITC is admissible only when GST at appropriate rate is paid by the Respondent to the third-party service providers.
- As the Respondent did not recover the amount from its employees for bus transportation there is no employer-employee relationship.
- That the ruling passed relating to point that GST at the hand of the Respondent is not leviable on free bus transportation facility provided to its employees, is erroneous.
Issue:
