Travel Benefits for Employees under GST Law: Restrictions on Input Tax Credit

According to the GST law, a registered person is allowed to provide travel benefits to their employees. However, if such benefits are given in the form of leave or home travel concession, the company cannot claim input tax credit on the expenditure. This is because such benefits are considered to be personal travel expenses provided as a perquisite to the employees.

It is important to note that this blockage of ITC only applies if the company bears the expenses for the travel directly. If the employees book the travel in their own name and then claim reimbursement, the company cannot even accrue ITC.

This restriction also applies to executive directors of the company, as they are considered to be employees. On the other hand, there is no specific provision under the GST law that blocks input tax credit for travel benefits extended to non-employees such as non-executive directors.

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