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

Employer-Provided Canteen and Transport for Contract Workers Not Subject to GST; Manpower Supply Service Is. Section 15(2) Relevant. An inquiry was raised about whether canteen and transport facilities provided by an employer to contract workers are subject to GST and if the employer must pay GST on a reverse charge basis. Responses clarified that such facilities are not subject to GST, but the manpower supply service is. If the contractor is registered, they charge GST; otherwise, the company pays under reverse charge. The reverse charge provision for unregistered dealers was suspended until March 31, 2018. Additionally, Section 15(2) of the CGST Act should be considered for supply valuation.