GST applies to employee recovery for statutory canteen services treated as business-related supply and consideration.

Employee recovery for third-party canteen services provided by an employer to meet a statutory factory obligation is treated as part of business activity under the CGST Act. Because canteen provision is incidental or ancillary to the employer's operations, the recovery from employees was regarded as consideration for a supply made in the course or furtherance of business. The food supply was also treated as a supply of service under Schedule II, and the transaction therefore fell within the GST charging framework. GST is accordingly applicable on the amount recovered from employees.

---

---

Issues: Whether GST is payable on the amount recovered from employees towards third-party canteen services provided by the employer in discharge of a statutory obligation under the Factories Act.

Analysis: The recovery from employees was held to be connected with the employer's business because canteen provision to workers is an incidental or ancillary activity. The definition of outward supply under section 2(83) of the CGST Act requires a supply made in the course or furtherance of business, and the definition of business under section 2(17) is wide enough to include such incidental activity. The supply of food was also treated as a supply of service under Schedule II, clause 6, and the amount recovered from employees constituted consideration within section 2(31) of the CGST Act. On that basis, the transaction was held to fall within the charging framework of GST.

Conclusion: GST is applicable on the employee recovery towards third-party canteen services, and the answer to the referred question was in the affirmative.

---