Canteen at plant

[POLYPLEX CORPORATIONLTD]

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?

AI Summary

GST on employer provided food: recoveries treated as taxable supply with open market valuation and conditional ITC availability.
Where an employer recovers any amount from employees for canteen services, the supply is treated as an outward taxable supply to a related party and must be valued at open market value (e.g., the canteen contractor's bill); concessional rate notifications impose conditions that may require applying a lower rate and forgoing corresponding input tax credit, while absence of recovery usually means no outward supply and may shelter the employer from GST. Input tax credit for food and beverages is generally disallowed unless the employer is legally obliged to provide such services under applicable labour law, in which case credit may be claimed subject to confirming that legal obligation.