GST on employee canteen recoveries is not leviable when the employer merely reimburses the third-party service provider without profit element.

GST is not leviable on an employer's recovery of employees' share of canteen charges where the canteen is maintained to meet the statutory requirement under the Factories Act and is operated through a third-party service provider. The employer bears part of the canteen cost, collects only the employees' portion, and passes it on to the contractor without retaining any profit margin. On these facts, the collection and onward payment are treated as a mere reimbursement without separate consideration, not as an independent taxable supply by the employer.

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Issues: Whether GST is leviable on the amount collected from employees towards their share of canteen charges and paid to the third-party canteen service provider.

Analysis: The canteen was arranged to meet the statutory requirement under the Factories Act and was operated through a third-party service provider. The applicant bore part of the canteen cost and recovered only the employees' portion, which was passed on to the contractor without retaining any profit margin. The activity of collection and onward payment of the employees' share was treated as being without consideration and not as an independent taxable supply by the applicant.

Conclusion: GST is not leviable on the amount representing the employees' portion of canteen charges collected by the applicant and paid to the canteen service provider.

Ratio Decidendi: A mere recovery and passthrough of employees' canteen contributions, made without profit element and without separate consideration, does not constitute a taxable supply by the employer.

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