Assessee, provider of 'Business Auxiliary Services', took credit of outdoor catering service used for providing 'canteen facility' for their employees. Department denied credit on ground that assessee was not a factory. CESTAT held that outdoor catering services were eligible for input service credit since provisions of factories Act show that law appreciates need of canteen service for workers even of small organisations less than 250 workers.-007545
1. Assessee is a service provider under the category of "Banking and Other Financial Services" and also "Business Auxiliary Services".
2. Assessee, took credit of outdoor catering service used for providing 'canteen facility' for their employees.
3. Department denied credit on ground that assessee was not a factory and not even in a business which requires '24 × 7 operations' like BPO service and therefore, said facility was in nature of fringe benefits to employees and had no relationship with output services.
4. HELD- CESTAT stated that provisions of Factories Act show that law appreciates need of canteen service for workers at place of work and only with a view to avoid hardship for small assessees, law has provided that, at least in factories having employees more than 250, such facility is mandatory and same does not mean that service was not required for any industrial or service organization having less than 250 workers.
5. Even employees of a smaller organization having less than 250 workers will be hungry and require canteen facility.
6. Hence, outdoor catering services were eligible for input service credit.[In favour of assessee]
Commissioner of Service Tax,Mumbai-I v. Reliance Capital Asset Management Ltd.
(CESTAT, MUMBAI BENCH)
[2015] 58 taxmann.com 189 (Mumbai - CESTAT)