Transportation provided to employees by employer subject to GST under CGST/HGST Acts. Valuation per Section 15.

The appellate authority ruled that the transportation facility provided by the employer to its employees, whether free of cost or for a nominal amount, is subject to GST under the HGST/CGST/IGST Acts. The valuation of these services should be determined under Section 15 of the CGST/HGST Acts. The transportation facility was deemed to be in furtherance of the employer's business and not part of the employer's Corporate Social Responsibility activities. The ruling clarified that such transportation services are taxable and not considered part of the employee's salary or contractual obligation.

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Issues Involved:
1. Whether GST is payable on the transportation facility provided by the employer to its employees free of cost.
2. Whether GST is payable on the recovery of a nominal amount for air-conditioned transportation provided by the employer to its employees.
3. Whether the transportation facility provided falls under the definition of consideration.
4. Whether the transportation facility is a part of the employer's Corporate Social Responsibility (CSR).
5. Whether the transportation facility provided is in furtherance of the employer's business.
6. Application of the CBIC's press release dated 10.07.2017.
7. Comparison with the Advance Ruling in the Tata Motors Ltd. case.
8. Determination of the valuation of the transportation facility under Section 15 of the CGST/HGST Acts.

Comprehensive Analysis:

1. GST on Free Transportation Facility:
The Authority for Advance Ruling (AAR) ruled that the transportation facility provided by the employer to its employees free of cost is taxable under the provisions of the HGST/CGST/IGST Acts. The valuation of such services is to be determined under Section 15 of the CGST/HGST Acts.

2. GST on Nominal Recovery for Air-Conditioned Transportation:
The AAR also ruled that the transportation facility provided by the employer to its employees for a nominal amount due to air-conditioning is taxable under the provisions of the HGST/CGST/IGST Acts. The valuation of such services is to be determined under Section 15 of the CGST/HGST Acts.

3. Definition of Consideration:
The appellant argued that the transportation facility provided free of cost or against nominal recovery does not fall under the definition of consideration. However, the AAR concluded that the element of consideration is present in the applicant's case, making such services taxable.

4. Corporate Social Responsibility (CSR):
The appellant claimed that providing transportation facilities to employees is part of CSR activities. However, the appellate authority found that this activity does not fall under CSR as per the Companies Act, 2013. The relevant sections and Schedule VII of the Companies Act were examined, and it was concluded that transportation facilities for employees are not covered under CSR activities.

5. Furtherance of Business:
The appellate authority observed that the transportation facility is provided to ensure smooth attendance of employees, which serves the employer's business motives. Therefore, it is in furtherance of the employer's business and is taxable under GST.

6. CBIC's Press Release dated 10.07.2017:
The appellant relied on the CBIC's press release, which states that services provided by the employer to the employee in terms of contractual agreement are not subject to GST. However, the appellate authority noted that the transportation facility is exclusive of the contractual obligation of the employer in the course of employment and is provided to suit business requirements, making it taxable.

7. Comparison with Tata Motors Ltd. Case:
The appellant cited the Advance Ruling in the Tata Motors Ltd. case, where it was ruled that no GST is applicable on the transport facility provided to employees. However, the appellate authority found that the facts of the Tata Motors Ltd. case were different and not applicable to the present case.

8. Valuation under Section 15 of CGST/HGST Acts:
The appellate authority upheld the AAR's ruling that the valuation of the transportation facility provided by the employer to its employees should be determined under Section 15 of the CGST/HGST Acts. The ruling also clarified that the transportation facility provided is not a component of the employee's salary and is not covered under the employer's contractual obligation.

Ruling:
The appellate authority concluded that the transportation facility provided by the employer to its employees is exclusive of the contractual obligation of the employer in the course of employment and is in furtherance of the employer's business. Therefore, it is liable to GST on a value that exceeds the total gift value of Rs. 50,000 given by the employer to an employee in a financial year. The transactions executed in the course of the contractual obligation of an agreement of employment are beyond the scope of GST as clarified in the CBIC's press release dated 10.07.2017.

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