GST ON CONCESSIONAL FOOD TO EMPLOYEES

[CABIJENDERKUMAR BANSAL]

Dear All,

I have a query regarding GST treatment on Concessional Food to employees.

For example:- company is getting Tiffin from outside @40 Rs. and charging to employees and contractor workers @15 rs. balance 25 rs. is contributed by company.

Our query is, on which amount we should charge GST ? Whether on 15rs. or 40 rs. or (40+10%= 44) and take credit of GST on purchase of 40 rs./-

Thanks,

Gorav Goyal

8447589778

[Yash Jain]

Dear Sir,

Please charge GST On value as being recovered from the Employees Only. (Rs.15)

Regards

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Yash

[Rajagopalan Ranganathan]

Sir,

You have to charge gst on that portion of the price which is borne by your employees.

[KASTURI SETHI]

I concur with the views of the experts.

[KASTURI SETHI]

Charging of food expenses from the employees for the canteen services by the employer/company is covered under the definition of "outward supply" as defined under Section 2 (83) of CGST Act, 2017.

[MUKUND THAKKAR]

Kindly note that your company is not business of food supply . same business criteria is effected in GST.

But in such case portion of employee as per press release of 10th july, if the amount is part of appointment clause need not pay the GST.

In case of contractor you have to pay the GST amount of ₹ 40/- i/o ₹ 15.

This is my view other expert valuable comments are awaited.

[CABIJENDERKUMAR BANSAL]

Thanks for the reply.

as per our GST Auditors, they are asking to raise invoice @44 and taken credit on 40. That means we need to pay GST on extra amount @4 (44-40) which is extra cost to the company.

Their view is Employee and employer is related party as per GST Act, and valuation provisions will apply and 10% will be added to cost i.e. 40+10%=44

and credit will be taken on 40 ( invoice recd. from canteen food supplier).

Pls. clarify.

[Ganeshan Kalyani]

The similar provision was there in the Value added tax regime.

AI Summary

GST on concessional employee food: taxability generally on amount recovered, subject to related party valuation adjustments. GST on concessional employee food is generally charged on the amount recovered from employees, the employer's recovery constituting an outward supply. Some auditors rely on related party valuation principles to add a deemed margin to the supplier's invoice value to determine taxable value, while input tax credit is claimed on the supplier's actual invoice.