We have an canteen at plant having more than 250 Employees & will pay canteen contractor full amount. We are providing subsidized foods to employees i.e. 50% will recover from their salary.
Question 1 - Whether We pay GST on 5% on the recovery amount from employees salary or GST will be payable by us on full Value of Canteen Contractor Invoice?
2. If we pay gst full value on contractor Bill & don’t recover anything from employees then ITC is eligible?
GST on Subsidized Canteen Food: Charge 18% on Employee Recovery; ITC Available if No Charge and Legally Required A company operating a canteen for over 250 employees inquires about GST obligations on subsidized food. The main questions are whether GST should be paid on the recovered amount from employees' salaries or on the full canteen contractor invoice, and the eligibility for Input Tax Credit (ITC) if no recovery is made. Responses indicate that if employees are charged, GST is applicable on the market value at 18% due to the employer-employee relationship. If nothing is recovered, ITC may be claimed if providing food is legally obligatory. Legal interpretations and potential litigation are noted, with advice to confirm obligations under relevant laws. (AI Summary)
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