Input tax credit— Section 17(5) of CGST Act—The present application has been filed by the applicant seeking an advance ruling in respect of the following questions.-

Whether the Applicant (Maanicare System India Pvt Ltd) is eligible to take input tax credit on GST paid under Reverse Charge Mechanism @ 5% for hiring of buses for transportation of employees?

The Applicant is a Private Limited Company engaged in the business of providing manpower services ; The Applicant had entered into agreement with M/s. Renaissance Jewellery Limited for supply of manpower at their premises. For supplying such manpower (who are applicant’s employees), the applicant, in order to enable its employees to reach the premises of M/s. Renaissance Jewellery Limited on time, had arranged a bus service through, M/s N.B.S. Travel, a proprietorship firm. The applicant is paying GST on reverse charge basis on the invoices received from M/s N.B.S. Travel and has asked the question whether they are eligible to avail Input Tax Credit of GST paid on reverse charge basis on the invoices received from M/s N.B.S. Travel. Thus the subject application is made only with respect to the particular transaction with M/s N.B.S. Travel.

Held that—  In the instant case, the bus service availed by the Applicant is 49-seater i.e. more than 13 seater. Accordingly, the same is not falling under the block credit as provided under Section 17(5) of CGST Act 2017 and, therefore, in the instant case, (since the applicant is utilizing the services of renting of motor vehicle for business or furtherance of business), the input tax credit is not restricted to the applicant under the referred Section 17(5) of CGST Act 2017. Thus the applicant would be eligible for ITC but only with effect from 01/02/2019 only, as per legal provisions.