Employee canteen recovery is taxable under GST when food supply is in furtherance of business and the charge is consideration.

A canteen facility maintained for employees under the Factories Act was treated as part of the business activity, not a mere welfare arrangement outside GST. The nominal amount recovered from employees was held to be consideration for the supply of food, and the absence of profit element or the label of mere recovery did not change its taxability. Because the food supply was in the course or furtherance of business and not excluded under Schedule III, the canteen supply was characterised as a taxable supply of service under GST. The question was answered in the affirmative, against the assessee.

---

---

Issues: Whether the nominal amount recovered from employees towards canteen food provided in compliance with the Factories Act, 1948 is liable to GST.

Analysis: The canteen facility was found to be part of the applicant's business activity and not a mere welfare arrangement outside the tax net. The facility was operated in furtherance of business, either directly by the applicant or through a third-party vendor, and the food supplied to employees was not treated as an employment benefit covered by Schedule III. The amount recovered from employees was held to be consideration for the supply of food, and the absence of profit element or the characterization of the amount as a recovery did not alter its taxability. The supply of food in the canteen was treated as a supply of service under the GST scheme.

Conclusion: The nominal amount recovered from employees for canteen food attracts GST and the answer to the question is in the affirmative, against the assessee.

Ratio Decidendi: A canteen supply made by an employer to employees for a nominal charge, even where the canteen is maintained under a statutory obligation and the charge is recovered without profit, is a taxable supply of service when it is in the course or furtherance of business and the amount recovered constitutes consideration.

---