How much do payroll services cost for small businesses?

The cost of payroll services can vary depending on the features you need and the size of your business. On average, most small businesses can expect to pay between $20 and $200 per month for payroll services

Can payroll services handle tax filing?

Yes, most payroll services automatically handle federal, state, and local tax filings, ensuring compliance with tax laws.

Is it better to outsource payroll or manage it in-house?

Outsourcing payroll saves time and reduces the risk of errors. It is often more cost-effective for small businesses to outsource payroll rather than hiring a full-time staff member to manage it in-house.

Can payroll services handle benefits administration?

Many payroll services also offer benefits administration, helping small businesses manage health insurance, retirement plans, and other employee benefits.

What happens if payroll errors occur?

If errors occur, most payroll services offer guarantees and will correct the mistake and handle any penalties resulting from their error.

Can I use payroll services for both full-time and part-time employees?

Yes, payroll services can handle payments for all types of employees, including full-time, part-time, and contract workers.

Section 17(5) of CGST Act 2017 Specifies the cases where Input Tax Credit (ITC ) is not available to the registered dealer

I MOTOR VEHICLES,VESSELS AND AIRCRAFTS

ITC is not available with regard to purchase of Motor Vehicles , Vessels and Aircrafts barring few exceptions as mentioned below

(a) Motor vehicles for transportation of persons like cars , motorcycles etc having approved seating capacity of less than 13 persons

Exceptions

When they are used for making the below mentioned taxable supplies namely

(A) further supply of such motor vehicles; or

Eg. ITC is available if the taxable person is dealing in sale and purchase of such motor vehicles

(B) transportation of passengers ( note here the difference between the usage of words persons and passengers)

Eg. ITC is available if the taxable person is into the business of plying vehicles for movement of passengers

(C) imparting training on driving such motor vehicles;

Eg. ITC is available if the taxable person is running a Driving Traning Institute

(b) Vessels and aircraft

Exceptions

When they are used for making the below mentioned taxable supplies namely

(A) further supply of such vessels or aircraft; or

(B) transportation of passengers and /or goods ; or

(C) imparting training on navigating such vessels; or

(D) imparting training on flying such aircraft;

(c) services of general insurance , servicing , repair and maintenance of afore mentioned motor vehicles, vessels and aircraft

Exceptions

(A) ITC is available if the motor vehicles , vessel or aircraft are used for the purposes specified in the Exceptions

(B) ITC is available if the registered applicant is into the business of Manufacturing of such motor vehicles , vessels or aircrafts

(C) ITC is available if the registered applicant is into the business of Provision of supply of general insurance services

Question 1) XYZ Enterprises is engaged in the business of manufacturing food products . The company procures a SUV Vehicle for the Marketing Director for ease of travel for business meetings. Can they claim ITC paid on purchase of car , annual insurance and repair and maintenance cost?

Answer 1) No , ITC cannot be claimed by XYZ Enterprises as Section 17(5) of CGST Act 2017.

Question 2) ABC Enterprises had hired a bus (having seating capacity) of more than 13 persons for the purpose of movement of it’s employees from home to workplace and back. Whether ITC will be available to ABC Enterprises for Gst paid on Bus Rental/Leasing service?

Answer 2) Yes, ITC wil be available. With effect from 1-2-2019, Input Tax Credit has been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than thirteen persons (including the driver). Relevant Case Tata Motors Ltd (2020) 119 taxmann.com 106 (AAR Maharshtra)

Question 3) Ambika Textiles purchases a commercial vehicle for the purpose of supply of goods to it’s clients and also purchases a bus ( having seating capacity of more than 13 persons) for movement of it’s workforce to and fro from the factory. Whether ITC will be available on purchase of vehicles?

Answer 3) Yes, ITC will be available as the commercial vehicle is being used for transportation of goods . ITC will also be available on the bus purchase as it has a seating capacity of more than 13 persons and doesn’t falls under the Motor vehicles specified in Section 17 (5) clause (a)

The Tax Planet’s Tip

Though ITC is not available on purchase of motor vehicle like cars , motorcycles and other similar vehicles but it doesn’t means that Gst paid on them is lost because the taxable person can still claim depreciation ( 20% in most cases) on the full purchase price (inclusive gst) which helps in reducing their Income Tax Liability.