AAR holds Canteen ITC Is Limited to the Employer-Borne Cost to the applicant

Aditya Auto Products, a factory covered by Section 46 of the Factories Act, engaged a Canteen Service Provider for its employees and contract workers. The AAR held that the statutory obligation to provide a canteen overrides the restriction under Section 17(5)(b), but only for regular employees and only to the extent the employer actually bears the cost. Amounts recovered from employees do not qualify for ITC, and the position is different for contract workers for whom there is no statutory employer obligation.