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Tata Motors Limited - Maharashtra AAR

Applicant has engaged a service provider for transportation facilities (non-airconditioned bus with more than 13 seating capacity) to its employees and recovers nominal amount from its employees against the said facility.

Applicant sought whether GST will be applicable on amount recovered from its employees against bus transportation facility and whether ITC will be restricted to the extent of cost borne by the Applicant-employer.

HELD that w.e.f. 1st December 2019 ITC is allowed on leasing, renting, or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than 13 persons and since the said services are used by the Applicant in the course or furtherance of business ITC is eligible.

For the recoveries made by Applicant from their employees, the transaction is in the nature of “Employer-Employee” relation and hence not a supply under GST. However, ITC is available to the only on the amount borne by employer. ITC is not available on transportation cost recovered from employee.

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