CANTEEN AND TRANSPORT FACILITY TO CONTRACT LABOURS

[ANITA BHADRA]

Sir

Benefit of Canteen and Transport facility extended to Contract worker by an employer is subject to GST ?

If yes ,, whether employer need to pay GST on RCM Basis .

Regards

[Ganeshan Kalyani]

Company gets the contract labours from a manpower supply agency. The agency charges the company for supply of labour. The agreement between contractor and company may include the food and transport allowance. Hence food and transport facility provided to contract Labour is not subject to GST.

However the service of manpower supply by the contractor will attract GST. If he is registered then he will charge tax on invoice otherwise the tax is liable to be paid by company under reverse charge. But the provision of reverse on inward supply from unregistered dealer is suspended tilp 31.03.2017.

[Ganeshan Kalyani]

Please read last sentence of my previous reply as *31.03.2018.

[CSSANJAY MALHOTRA]

Section 15(2) of CGST Act shall be referred to for valuation of supply. Any expense which recipient incurs but needs to be incurred by supplier forms part of supply liable to GST.

[ANITA BHADRA]

Thank you so much for your valuable responese.

Regards

CA Anita Bhadra

AI Summary

GST on manpower supply: canteen and transport included in the service; reverse charge may apply for unregistered suppliers. Canteen and transport provided under a manpower supply agreement form part of the manpower supply service and are not separate taxable supplies; the manpower supply attracts GST. If the supplier is registered, GST is charged on invoice; if unregistered, the recipient may be liable under the reverse charge mechanism. Valuation principles require inclusion of expenses borne by the recipient that should have been incurred by the supplier in the taxable value.