Amendment of section 16

In section 16 of the principal Act, in sub-section (2),—

1. (a) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:— "Explanation:—For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services,—
   • (i) where the goods are delivered
   • (ii) for transportation of goods:
2. (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa): Provided that the input tax credit in respect of such services shall be available,—
   • (i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein:
   • (ii) where received by a taxable person engaged,—
   • (I) in the manufacture of such motor vehicles, vessels or aircraft; or (II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;
3. (b) the following supply of goods or services or both,—
   • (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available, where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
   • (ii) membership of a club, health and fitness centre and (iii) travel benefits extended to employees on vacation such as leave or home travel concession: Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force."