Canteen turnover exemption fails where a joint canteen is run by employers, including one without statutory obligation.

Exemption for canteen turnover under G.O. Press No. 2238, Revenue, dated 1 September 1964, was confined to a canteen run by an employer under a statutory obligation, without profit motive, and with employer subsidy of at least 25% of total expenses. A jointly run canteen by three sister concerns did not qualify where one participating concern was not under any statutory obligation to maintain a canteen. The sales were made jointly by the employers and could not be split into exempt and non-exempt portions for individual employers. The entire turnover was therefore held taxable.

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Issues: Whether the turnover from a canteen run jointly by three sister concerns, where only two employers were under a statutory obligation to maintain a canteen, was exempt under G.O. Press No. 2238, Revenue, dated 1st September, 1964.

Analysis: The exemption applied only where the canteen was run by an employer under a statutory obligation, without profit motive, and with employer subsidy of at least 25 per cent of the total expenses. A joint canteen run by multiple employers could not qualify where one of the participating concerns was not under any statutory obligation. The sales in such a canteen were made by the employers jointly and could not be severed into exempt and non-exempt portions for individual employers. The turnover could not therefore be split up to grant exemption only in respect of part of the sales.

Conclusion: The entire turnover from the canteen was not exempt and was liable to be included in the taxable turnover.

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