The Factories Act, 1948, is a crucial legislation enacted to regulate the conditions of work in factories, ensuring the health, safety, and welfare of workers. One of the significant welfare provisions under this Act mandates that factories employing 250 or more workers provide canteen facilities to their employees. This requirement stems from the government’s commitment to improve worker well-being by offering hygienic and affordable food on factory premises.
The legal obligation applies to all factories that meet the specified workforce threshold. The canteen facilities are meant to offer workers convenient access to meals during working hours, promoting their health and productivity. It is the employer’s responsibility to either operate the canteen themselves or arrange for its operation through third-party caterers.
In practice, many employers opt to outsource canteen services to professional caterers who manage food preparation and service within the factory premises. This outsourcing arrangement typically involves the caterer charging GST on the service supplied to the employer.
Often, employers partially recover the canteen expenses by charging employees a nominal amount for the food provided, a practice referred to as partial recovery for canteen services. This arrangement does not negate the employer’s obligation but helps offset the overall canteen operational costs.
With the introduction of the Goods and Services Tax (GST) regime, employers face the critical question of whether they can claim input tax credit (ITC) on GST paid for such canteen services. This issue has gained attention following recent rulings by tax authorities, including the Gujarat Authority for Advance Ruling (AAR), which denied ITC eligibility for GST paid on canteen facilities mandated under the Factories Act. This has triggered a need for a comprehensive understanding of the legal framework surrounding this issue.
This article begins by discussing the statutory mandate under the Factories Act and then examines the relevant GST provisions governing ITC to set the stage for further analysis.
Statutory Requirement of Canteen Facilities Under the Factories Act
Overview of Section 46 of the Factories Act, 1948
Section 46 of the Factories Act requires factories employing 250 or more workers to provide suitable canteen facilities. The law stipulates that these canteens should offer wholesome and hygienic food at reasonable prices. The primary objective is to ensure that factory workers have access to nutritious meals in proximity to their workplace.
Employers must ensure the canteen is maintained in accordance with prescribed standards for cleanliness, hygiene, and service. The provision of this facility is not optional but a legal mandate that must be complied with, subject to enforcement and penalties.
The Act thereby reflects the government’s intent to promote industrial welfare by addressing worker nutrition and comfort, factors that contribute to improved labor efficiency and satisfaction.
Options for Compliance: In-house Operation vs Outsourcing
Employers have two main options to fulfill the canteen facility requirement:
- Operating the canteen directly by setting up the facility and managing food services using their own resources.
- Engaging third-party caterers or contractors who specialize in food services to run the canteen within the factory premises.
The latter approach is preferred by many employers due to ease of management, access to expert services, and reduction of administrative burden. Under such arrangements, the caterer provides food and related services, invoicing the employer and charging GST accordingly.
Partial Recovery from Employees
Although the employer bears the primary responsibility for providing the canteen, many factories charge employees a nominal fee for meals consumed in the canteen. This partial recovery of expenses does not absolve the employer of the obligation but serves to offset some of the operational costs.
The amount recovered from employees typically does not cover the full expense of maintaining the canteen, with the employer absorbing the remaining cost.
This aspect is relevant when evaluating whether the input tax credit on GST paid can be claimed by the employer since the service is partially subsidized.
Introduction to GST Provisions Governing Input Tax Credit
Concept of Input Tax Credit Under GST
The Goods and Services Tax (GST) system introduced in India from July 1, 2017, is a destination-based tax on consumption that replaced multiple indirect taxes levied by central and state governments. One of the key benefits of GST is the availability of input tax credit, which enables businesses to claim credit for GST paid on inputs (goods or services) used in their business.
Input tax credit is designed to eliminate the cascading effect of taxes and reduce the overall tax burden on businesses, thereby promoting ease of doing business and compliance.
Section 16 of the CGST Act: Eligibility Criteria for ITC
Section 16 of the Central Goods and Services Tax (CGST) Act, 2017, prescribes the conditions for claiming input tax credit. According to this section, a registered taxpayer can claim ITC on goods or services used or intended to be used in the course or furtherance of business.
The key points under this section include:
- The person claiming ITC must be registered under GST.
- The goods or services on which ITC is claimed should be utilized for business purposes.
- The person should be in possession of a tax invoice or other prescribed documents.
- The ITC claim must be timely filed, and other procedural requirements complied with.
The expression “in the course or furtherance of business” is critical and has been widely interpreted by courts and authorities to encompass all activities integral or incidental to business operations.
Section 17(5) of the CGST Act: Blocked Credits
While ITC is generally available on business inputs, Section 17(5) of the CGST Act lays down specific restrictions by listing goods and services on which ITC is blocked or denied.
Some of the key categories where ITC is disallowed include:
- Food and beverages
- Outdoor catering
- Health services
- Membership of clubs or fitness centers
- Travel benefits extended to employees on vacation
The rationale for blocking ITC on these items is that they are generally considered personal consumption or employee welfare expenses, not directly linked to taxable business output.
Exceptions to the Blocked Credit Rule
The statute provides certain exceptions where ITC can be claimed even on blocked categories. Specifically, ITC is allowed where the inward supply of such goods or services is used for making an outward taxable supply of the same category or forms part of a taxable composite or mixed supply.
Moreover, a provision following sub-clause (iii) of Section 17(5)(b) states that ITC shall be available where such goods or services are legally mandated to be provided to employees under any law in force.
This proviso introduces complexity and forms the crux of the debate on ITC eligibility for canteen services mandated under the Factories Act.
Analysis of the Proviso in Section 17(5)(b)
Textual Interpretation Issues
The proviso after sub-clause (iii) mentions that ITC will be available if the supply of goods or services is obligatory for an employer to provide to employees under any law. However, the wording and placement of the proviso have led to differing interpretations.
Some argue that the proviso applies only to travel benefits to employees mentioned in sub-clause (iii), given its positioning and indentation in the text. Others contend that the proviso should apply broadly to all goods and services listed under Section 17(5)(b), including food and beverages and outdoor catering.
The Gujarat Authority for Advance Ruling recently held that the provision only relates to travel benefits and not to food or catering services, leading to denial of ITC on GST paid for canteen services mandated by the Factories Act.
Legislative Intent and Drafting Conventions
Standard legislative drafting practices use colons and semicolons to separate clauses and provisos. The punctuation in Section 17(5)(b) has been interpreted by some authorities to indicate independent reading of sub-clauses and their respective provisions.
However, others argue that the phrase “such goods or services” in the proviso indicates an intent to cover all goods and services in the clause, not just travel benefits. This interpretation aligns with the purpose of the proviso to avoid penalizing employers for statutory compliance costs.
Relevant Interpretative Principles
When interpreting statutes, courts emphasize giving effect to every word and phrase. The inclusion of “goods or services” in the proviso is significant because sub-clause (iii) only refers to travel benefits, which are services.
If the proviso were limited to sub-clause (iii), its reference to goods would be redundant. Hence, a broader reading suggests that the proviso intends to grant ITC eligibility wherever the employer is mandated by law to provide goods or services to employees, including canteen facilities.
Practical Implications for Employers
Employers required to maintain canteen facilities under the Factories Act incur GST on services obtained from caterers or suppliers. The ability to claim input tax credit on such GST impacts the effective cost of compliance.
If ITC is disallowed, the employer bears the full GST cost, increasing the overall expense of statutory compliance. Conversely, if ITC is allowed, it eases the tax burden, improving cash flow and reducing compliance costs. Understanding the legal provisions and their interpretations helps employers align their accounting and tax practices and take informed decisions regarding canteen operations.
Introduction to Legal Interpretations and Judicial Perspectives
We discussed the statutory framework governing the provision of canteen facilities under the Factories Act, 1948, and the relevant GST provisions regulating input tax credit (ITC) eligibility, especially the complexities of Section 17(5)(b) of the CGST Act, 2017. Deepens the discussion by analyzing key judicial pronouncements, advance rulings, and legal interpretations that influence the admissibility of ITC on GST paid for canteen services mandated under law.
The legal landscape in this domain is marked by divergent interpretations, primarily revolving around the application scope of the proviso in Section 17(5)(b) and the scope of “in the course or furtherance of business.” Understanding the judicial approach is vital for employers and tax practitioners when making compliance and litigation-related decisions.
Judicial Interpretation of “In the Course or Furtherance of Business”
Broad Interpretation by the Supreme Court
The Supreme Court of India has elaborated on the phrase “in the course or furtherance of business” in several landmark judgments. The Court has consistently held that the phrase is broad and inclusive, extending beyond direct business activities to cover all activities that are integral or incidental to business operations.
For instance, in one key ruling, the Court observed that activities related to administrative management, statutory compliance, modernization, protection of business assets, and employee welfare fall within the ambit of “furtherance of business.” This interpretation aligns with the principle that a business must incur certain costs to maintain its operations and comply with legal obligations.
Applying this to the canteen facility mandate, expenses incurred in providing canteen services to workers as required by the Factories Act can be regarded as costs incurred in furtherance of business. Hence, ITC eligibility should be granted, subject to other statutory conditions.
Implications of the Broad Interpretation
The broad judicial approach provides a strong foundation for employers to claim ITC on canteen services mandated by law. It recognizes that the provision of such facilities directly or indirectly supports the business by ensuring employee welfare and operational continuity.
This view contrasts with a narrow interpretation that restricts ITC eligibility only to goods or services used directly in the production or supply of taxable goods or services.
Advance Rulings on ITC for Canteen Services
Gujarat Authority for Advance Ruling (AAR) on the Issue
A significant development on this topic is the ruling by the Gujarat AAR, which denied ITC on GST paid for canteen services provided to employees as mandated by the Factories Act. The AAR’s reasoning was grounded on its interpretation of Section 17(5)(b).
The AAR held that the provision allowing ITC for legally mandated services applied only to travel benefits (sub-clause iii) and not to food and beverages or outdoor catering services (sub-clauses i and ii). The AAR interpreted the punctuation and structure of the statutory text to conclude that the proviso did not extend ITC eligibility to canteen services.
This ruling has set a precedent, creating uncertainty for employers seeking ITC on mandatory canteen facilities.
Other Advance Rulings and Decisions
Contrasting the Gujarat AAR’s view, some other advance rulings and tribunal decisions have taken a more liberal stance, recognizing the proviso’s broader applicability. These rulings have allowed ITC on canteen expenses where the provision is legally mandated.
These differing decisions highlight the lack of uniformity in the interpretation of the GST provisions, underscoring the need for clarity from higher judicial forums or legislative amendments.
Legislative and Policy Considerations
Intent of the Lawmakers
When interpreting tax statutes, it is crucial to consider the legislative intent and policy objectives behind the provisions. The GST law aims to promote ease of doing business by eliminating tax cascading and providing input tax credits on business-related expenses.
The prohibition on ITC for food and catering services appears to be targeted primarily at personal consumption or welfare expenses that do not directly relate to business. However, the proviso suggests an exception when these services are legally mandated.
This indicates a legislative recognition that employers should not be penalized tax-wise for complying with statutory obligations related to employee welfare, such as canteen facilities under the Factories Act.
GST Council and Government Clarifications
The GST Council, the apex decision-making body for GST matters, and other government communications have clarified on multiple occasions that ITC should be allowed on goods and services provided to employees if such provision is mandated by law. This includes food, beverages, and travel benefits.
These clarifications reinforce the argument for ITC eligibility on canteen services legally mandated under the Factories Act, although these are not binding on judicial bodies.
Analysis of Section 17(5)(b) Wording and Proviso Application
Legislative Drafting Techniques and Punctuation
Legal experts have analyzed the punctuation marks—colons and semicolons—used in Section 17(5)(b) and the positioning of the proviso to understand its scope.
The use of a colon before the list of blocked goods and services typically introduces a list that is inclusive. The semicolons separating each sub-clause suggest separation of different categories, but the proviso following the third sub-clause is worded broadly to refer to “such goods or services,” implying it applies collectively to all categories. This interpretation is consistent with legislative drafting principles that avoid rendering parts of the law redundant or meaningless.
Implication of Restrictive Interpretation
Restricting the proviso to only travel benefits, as some rulings have done, leads to inconsistent and arguably unfair results. It excludes canteen services, which are a statutory requirement similar in nature to travel benefits extended to employees.
Such a restrictive interpretation undermines the statutory purpose of enabling ITC on mandatory employee benefits and increases the compliance cost for employers.
Practical Impact on Employers and Businesses
Financial Burden of Disallowed ITC
If ITC on GST paid for canteen services is disallowed, employers effectively bear the GST cost as an additional expense. This increases the cost of statutory compliance and may discourage employers from fully adhering to welfare mandates.
Given that canteen services are often outsourced to third-party caterers charging GST, non-availability of ITC leads to higher net costs, impacting employer budgets and financial planning.
Accounting and Compliance Challenges
Employers need to carefully evaluate their GST compliance strategy regarding canteen services. They must determine whether to claim ITC based on their interpretation of the law, the risk of denial in audits, and prevailing rulings.
The ambiguity in law and divergent rulings create challenges for maintaining consistent accounting records and tax positions, leading to potential disputes with tax authorities.
Employee Welfare and Industrial Relations Considerations
Beyond tax implications, the provision of canteen facilities is a critical factor in employee welfare and satisfaction. Employers must balance the financial impact of GST and ITC restrictions with the operational need to maintain healthy and motivated workforces.
Companies may also face scrutiny from labor regulators if statutory canteen provisions are not complied with due to cost constraints.
Comparative Perspective: ITC on Employee Benefits in Other Jurisdictions
International Practices on Input Tax Credits for Employee Welfare
Globally, value-added tax (VAT) or GST regimes vary in their treatment of input credits on employee welfare expenses. Many jurisdictions exclude personal consumption items from input credits but allow exceptions for mandatory provisions under labor laws.
This aligns with the principle that statutory compliance costs should not be unduly penalized, ensuring businesses are not discouraged from adhering to labor welfare standards.
Lessons for Indian GST Framework
India’s GST framework could benefit from harmonizing its ITC rules with international best practices by explicitly clarifying that ITC is allowable on statutory employee welfare services, including canteen facilities.
Such clarity would improve taxpayer certainty, reduce litigation, and encourage compliance with employee welfare mandates.
Recommendations for Employers and Practitioners
Maintaining Detailed Documentation
Employers should maintain thorough documentation evidencing the legal mandate to provide canteen facilities, invoices and GST payment records, and the recovery of nominal amounts from employees. This documentation will be critical in supporting ITC claims in the event of audits or disputes.
Reviewing Contracts with Caterers
Employers outsourcing canteen services should ensure that their agreements clearly specify the scope of services and GST invoicing to facilitate ITC claims. Proper contractual arrangements help avoid ambiguity in the tax treatment of these services.
Staying Updated on Legal Developments
Given the evolving nature of rulings and clarifications in this area, employers and tax advisors should closely monitor judicial pronouncements, advance rulings, and GST Council recommendations to adapt their compliance strategies accordingly.
Considering Legal Remedies Where Denial Occurs
In cases where tax authorities deny ITC on canteen services despite the legal mandate, employers may need to explore legal remedies such as appeals or writ petitions based on the broad interpretation of Section 16 and the proviso under Section 17(5)(b).
Introduction to Practical Considerations in Claiming ITC on Canteen Services
We focus on the practical aspects of claiming input tax credit on canteen facilities mandated by the Factories Act, 1948. It explores real-life scenarios, industry practices, challenges faced by employers, and best practices to ensure compliance while optimizing tax benefits.
The discussion also highlights examples from various sectors, shedding light on how businesses navigate the complex GST provisions and compliance requirements surrounding canteen services.
Industry Practices in Managing Canteen Services and GST Compliance
Outsourcing vs. In-house Canteen Operations
Many factories and manufacturing units choose between outsourcing canteen services to third-party caterers or operating the facility in-house. Both models have different GST and ITC implications.
When canteen services are outsourced, the caterer issues GST invoices to the factory, which then claims ITC on the tax paid, provided eligibility conditions are met. In-house canteen operations might involve purchasing raw materials and services separately, complicating the ITC claim process.
Understanding these operational differences helps employers design appropriate GST compliance strategies for claiming ITC on input services related to canteen facilities.
Partial Recovery from Employees and GST Treatment
Most employers recover a nominal amount from employees as a contribution towards the food served in canteens. This partial recovery is relevant from a GST perspective since it may be treated as a supply by the employer to the employees, attracting GST.
Proper accounting of this recovery ensures accurate GST liability calculation and ITC reconciliation. Employers must consider this aspect when assessing the net cost of canteen services and the corresponding ITC claim.
Handling GST on Supplies by Third-party Caterers
Third-party caterers providing canteen services charge GST on their invoices. Factories must verify that these caterers are registered taxpayers issuing valid GST-compliant invoices to claim ITC.
Employers should maintain records of service agreements, invoices, and payment proofs to substantiate their ITC claims and comply with audit requirements.
Case Study 1: Manufacturing Unit Claiming ITC on Outsourced Canteen Services
A manufacturing company employing over 300 workers outsourced its canteen services to a GST-registered catering firm. The caterer charged GST at the applicable rate on monthly invoices.
The company recovered a small amount from employees as food charges. The employer claimed ITC on the GST paid to the caterer, citing the legal mandate under the Factories Act to provide canteen facilities.
During a GST audit, the department challenged the ITC claim, relying on the Gujarat AAR ruling denying ITC on canteen services. The company argued that the proviso under Section 17(5)(b) applies to all food and beverage services mandated by law.
The dispute escalated to the appellate authority, where the company presented Supreme Court interpretations on “furtherance of business” and GST Council clarifications.
Though the case was pending adjudication, the example highlights the practical challenges and need for well-documented legal arguments to support ITC claims on canteen facilities.
Case Study 2: Factory Operating In-house Canteen and GST Credit Claim
A factory operating its own canteen purchased raw materials such as groceries and beverages, incurring GST on these inputs. The facility was operated by factory staff, with no separate GST registration for the canteen.
The employer claimed ITC on the GST paid for raw materials used in the canteen, arguing that these inputs were essential for providing canteen facilities mandated under the Factories Act.
The tax authorities questioned the ITC claim, asserting that input services should be directly related to outward taxable supplies.
The employer referred to judicial interpretations supporting a broad view of “furtherance of business,” including statutory compliance costs.
This case emphasizes the importance of segregating canteen-related purchases and maintaining transparent accounts to substantiate ITC claims, particularly when the canteen is run in-house.
Addressing Common Challenges in ITC Claims on Canteen Services
Ambiguity in Legal Provisions and Conflicting Rulings
One of the main hurdles for employers is the ambiguity in the GST law and conflicting advance rulings, particularly regarding the proviso’s applicability under Section 17(5)(b).
Tax departments in some states disallow ITC on canteen services, while others accept it based on legal mandate. This inconsistency creates compliance uncertainty.
Employers must assess the risk of ITC denial and prepare for possible disputes by seeking advance rulings or legal opinions.
Documentation and Record-Keeping
Accurate documentation is critical to defend ITC claims on canteen services. This includes:
- Copies of contracts with caterers detailing the scope of services
- GST invoices issued by caterers or suppliers
- Proof of payment of GST
- Records of employee contributions towards canteen food
- Evidence of compliance with the Factories Act regarding canteen facilities
Maintaining these documents ensures readiness for audits and appeals.
Distinguishing Between Personal Consumption and Business Use
GST rules generally disallow ITC on goods or services used for personal consumption. Employers must clearly demonstrate that canteen services are provided as a statutory obligation for employees and not as a personal benefit to business owners or non-employee persons.
Segregating the usage and consumption patterns through proper accounting helps establish the business nexus.
Practical Guidance for Employers to Maximize ITC Benefits
Conducting a Legal and Tax Impact Assessment
Employers should undertake a detailed legal and tax impact assessment before claiming ITC on canteen services. This includes:
- Reviewing the applicability of the Factories Act to their workforce size
- Analyzing GST provisions and relevant judicial rulings
- Evaluating contractual arrangements with caterers
- Assessing the risk of ITC denial in audits
Such assessments enable informed decision-making and risk mitigation.
Engaging Professional Tax Advisors
Given the complexities and evolving nature of GST jurisprudence on canteen ITC, engaging qualified tax professionals is advisable. Expert advisors can:
- Interpret the latest legal developments
- Assist in drafting contracts and documentation
- Represent employers in disputes and appeals
- Help implement compliant accounting systems
Professional guidance improves the likelihood of successful ITC claims.
Training and Awareness for Internal Teams
Employers should train their finance and compliance teams on the nuances of ITC on canteen services. Awareness programs should cover:
- GST invoicing and documentation requirements
- Distinguishing taxable and non-taxable supplies
- Maintaining proper recovery and accounting of employee contributions
- Handling audit queries effectively
A well-informed team minimizes errors and non-compliance risks.
Illustrative Accounting Treatment for ITC on Canteen Services
Recording GST on Invoices from Caterers
When receiving GST invoices from third-party caterers, employers should:
- Verify the GSTIN and invoice correctness
- Record the input tax credit in the input tax ledger promptly
- Match the input tax with the corresponding GST return filing period
This ensures timely ITC claims and avoids blockage due to mismatches.
Accounting for Employee Recovery
Amounts recovered from employees for canteen food should be accounted as income or recovery against canteen expenses. GST on this recovery must be calculated and paid appropriately.
Proper segregation of these transactions in accounting software facilitates transparency and audit compliance.
Reconciliation and ITC Reversal Mechanisms
Employers should perform periodic reconciliation between canteen-related GST invoices, payments, recoveries, and ITC claims. Any discrepancies must be addressed proactively.
In cases where ITC is later denied by authorities, employers should reverse the ITC in their returns and account for interest and penalties, if applicable.
Impact of Future Legislative Amendments and Judicial Clarifications
Anticipated Clarifications from GST Council or Government
The ongoing ambiguity and disputes may prompt the GST Council or the government to issue clarifications or amendments explicitly addressing ITC on legally mandated employee welfare services such as canteen facilities.
Employers should watch for such developments to update their compliance frameworks accordingly.
Role of Higher Judicial Forums
Appeals before appellate tribunals, High Courts, or the Supreme Court may provide definitive legal interpretations, resolving conflicting advance rulings.
Employers with significant ITC at stake should consider legal representation in such forums to protect their interests.
Broader Implications for Employee Welfare under GST Regime
Encouraging Compliance with Statutory Welfare Requirements
Allowing ITC on canteen facilities mandated by the Factories Act aligns tax policy with labor welfare objectives, encouraging employers to comply with statutory welfare standards without financial burden.
This holistic approach supports industrial harmony and employee satisfaction.
Impact on Cost Structures and Pricing
Availability of ITC reduces the net cost of maintaining canteen facilities, positively influencing the overall cost structure of manufacturing units. This benefit may translate into competitive pricing and improved profitability.
Conversely, disallowance of ITC increases cost, potentially impacting product pricing and labor relations.
Conclusion
The provision of canteen facilities for employees under the Factories Act, 1948, is a statutory obligation for employers with a workforce exceeding 250 employees. While this mandate ensures employee welfare, the question of whether the GST paid on such canteen services qualifies for input tax credit has been a subject of considerable debate and divergent interpretations.
The statutory framework under the GST regime, particularly Section 16 and Section 17(5) of the CGST Act, 2017, governs the eligibility of ITC. Section 16 broadly allows credit on inputs and input services used in the course or furtherance of business, while Section 17(5) restricts ITC on certain goods and services, including food and beverages and catering services. However, the provision to Section 17(5)(b) provides a critical exception allowing ITC where these goods or services are mandated by law to be provided to employees.
Interpretations of this proviso have varied. The Gujarat Authority for Advance Ruling’s narrow interpretation limiting the exception to travel benefits, excluding canteen services, highlights the ongoing legal uncertainties. Yet, a comprehensive and purposive reading of the provisions, supported by principles of statutory interpretation and GST Council clarifications, supports a broader applicability of the proviso. This interpretation allows employers to claim ITC on canteen facilities that are legally mandated, recognizing these costs as integral to the furtherance of business and compliance with statutory welfare requirements.
From a practical standpoint, the manner in which canteen services are managed—whether outsourced or operated in-house—affects GST compliance and ITC claims. Employers must ensure proper documentation, GST-compliant invoicing, and careful accounting of employee recoveries to substantiate ITC claims. Common challenges include ambiguity in legal provisions, conflicting rulings, and tax authorities’ scrutiny. Proactive risk management through legal assessments, professional advice, and internal training is essential to navigate these challenges effectively.
Moreover, the broader policy implications underscore the importance of harmonizing tax laws with labor welfare objectives. Permitting ITC on GST paid for mandated canteen services reduces the compliance cost burden on employers, encourages adherence to statutory welfare provisions, and ultimately fosters a healthier work environment. It also positively impacts cost structures, aiding businesses in maintaining competitiveness without compromising employee benefits.
Looking ahead, clarity through legislative amendments, authoritative judicial pronouncements, or GST Council guidance would resolve existing uncertainties and promote uniformity in the treatment of ITC on canteen services. Until then, employers must remain vigilant, maintain robust compliance mechanisms, and be prepared to substantiate their ITC claims rigorously.
In conclusion, recognizing ITC on canteen facilities mandated by the Factories Act as admissible input credit aligns with the spirit of the GST law, supporting both business interests and statutory employee welfare obligations.