AAR confirms ITC Eligibility for GST on Canteen Services for Factory Employees

The AAR (Authority for Advance Rulings) has confirmed that GST Input Tax Credit (ITC) is eligible for canteen services provided to factory employees. The decision was made on the basis that such services are essential to the functioning of the factory and qualify as a legitimate business expense under GST law. The ruling clarifies that even though the canteen services are provided by a third-party contractor, the company can claim ITC on the expenses incurred for these services. This decision aligns with the principle that ITC can be claimed on inputs used to provide taxable output services.