Input & OutPut Tax on Susidised Casnteen

[Ravi K]

We have an canteen at plant having more than 250 Employees, canteen contractor billing at 5% GST. We are providing subsidized foods to employees & workmans supplied through Manpower Supply contractor, nominal amount will recover from Employees salary & Manpower Supply contractor.

Question 1 - Whether We can avail GST Input Credit on Canteen supply bill charged at 5%

Question 2 -Whether We can pay GST at 5% on the recovery amount from Employees salary or on Open market Value

Question 3 -Whether We can pay GST on 5% on the recovery amount from Manpower Supply contractor?

Also specify other options available with permutation and combination which reduces the cost to company

AI Summary

GST on subsidised employee canteen: input tax credit may be available if obligatory; employee recoveries may be non-taxable.
Entitlement to input tax credit on canteen supply depends on whether the employer is obligated by law to provide a canteen; ITC is available only for the proportionate/actual cost borne by the employer and not on amounts recovered from employees or contractors. Recoveries from employees provided as contractual perquisites are not subject to GST per Circular No. 172/04/2022 and related advance rulings, whereas recoveries from a manpower supply contractor are fact sensitive and hinge on principal-employer status and contract terms.