Can we take ITC on staff welfare expenses?

Ans: ITC on such items is eligible as these expenses are incurred in the course or furtherance of business and may not be said to be for personal consumption of the employees. Further, some of such expenses are considered eligible expenses for CSR purpose.

Can we claim ITC on expenses in GST?

ITC is only available for business purposes. Many traders use the same inputs for both business & personal. A taxpayer is not allowed to claim any input credit for GST paid on personal expenses. You will have an amount you are eligible to claim as ITC while filing your GST Returns.

Can we take ITC on staff uniform?

ITC can be availed on safety shoes, protective headgear, protective caps or uniforms. Input Tax Credit is eligible on telephone bill expenses used in the course of business. ITC is also eligible on air travel expenses by director or employees for business purposes.

What is included in staff welfare expenses?

For example:- Tea and refreshment expenses for the employees, medical expenses for the health of the employees or their family members, uniforms given to employees, concessional foods given to employees, personal accident insurance premium paid for employees etc.

Which expenses are not allowed in GST?

Cases Where Input Tax Credit under GST Cannot Be Availed

• Motor vehicles & conveyances.
• Food, beverages, club memberships and others.
• Services of general insurance, servicing, repair and maintenance.
• Sale of membership in a club, health, fitness centre.
• Rent-a-cab, life insurance, health insurance.
• Travel.
• Works contract.

Can we claim GST on staff amenities?

Pitfalls to avoid with staff amenities An issue we see quite regularly is businesses claiming their entertainment expenses (for which no GST credits can be claimed and for which Fringe Benefit Tax may be due) as staff amenities expenses (for which GST and other deductions can be claimed).

What expenses are eligible for ITC?

Eligible expenses under the ITC generally include business start-up costs, legal, accounting and other professional fees, office expenses, rent, etc.

Is GST applicable on gratuity?

As per the GST law, services provided by an employee to the employer in accordance with the employment agreement are neither considered as supply of goods nor supply of services. Hence, GST is not leviable in such cases.

Can we claim GST on dress?

Can gst input be claimed on uniform and dress exps of staff members. Reply— Section 16 of CGST Act, clearly states that input tax credit can be taken of any good or service purchased for ‘Furtherance of Business’.

Is staff welfare taxable?

Welfare counselling made available to all employees generally on similar terms is exempt from tax.

What are staff expenses?

What are Employee Expenses? In simple terms, these are expenses that are incurred by the employee in the performance of their duties and are directly related to the nature of the employment not linked to their salary/wages.

Can ITC be claimed on indirect expenses?

Maharashtra Authority for Advance Ruling (Mah AAR) ruled that Input Tax Credit cannot be claimed on Indirect Expenses like rent, commission, professional fees, telephone incurred for purpose of business.

Can an employer claim ITC on coffee under GST?

Ans. ITC on food items is not available, coffee falls in this category. Can an employer claim Input Tax credit for taking their employees on team lunch to restaurants under GST? Ans. No, Section 17 (5) of CGST disallows ITC on Food and beverages. A restaurant bill will fall under this.

Can I claim ITC against staff welfare on buying coffee?

Yes, ITC can be claimed against staff welfare, on buying coffee, provided the tax invoice raised by the seller of coffee powder shall mention his as well as receiver’s GSTIN. The tax component shall be shown separately on the tax invoice. GST Edge is a fin tech organization, providing one stop solution to all your GST problems.

Which accommodation expenses are not eligible for ITC under GST?

For accommodation services provided to employees other than those required for business purposes shall not eligible for ITC under GST. But ITC for the following accommodation expenses can be claimed: For hotel expenses paid for employee gone to attend an urgent meeting. For PG/Room hired for rent by an employee for business purposes.

What is the GST rate for ITC on goods and services?

In such cases, in terms of notification no.11/2017-CT, GST rate of 5\% would be applicable and no other rate can be applied. Once 5\% rate is applied, the same is subject to condition that no ITC on goods or services is claimed. Therefore, no ITC would be eligible where amounts are being recovered from the employees.