TaxTMI 
TaxTMI 
2021 (3) TMI 707
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...., they provide optional subsidized shared transport facility to their employees for to and from commutation between office and residence. This facility is provided by third party vendor who issues bill in the name of the applicant and charges GST therein. However, the applicant has not availed any input tax credit on the same. As regard to the payment to the third party vendor, towards transport charges, the applicant deducts subsidized amount from the salaries of employees and bear the balance cost itself. 4). As per applicant, their standard working hours are 12.00 pm to 09.00 pm and as per Section 22 of the U.P. Dukaan our Vanijya Adhisthan Adhiniyam,1962 read with Notification No. 2398/ 36-03-05/ dukan-Vanijya/ 99 dated 28.10.2005, they are required to arrange transport facility for the female workers for onwards and return journey, between work place and home, if the female workers are employed from 7.00 pm to 10.00 am. In view of this, the applicant is providing transport facility to its employees. 5). Accordingly, the following questions have been asked by the applicant, in his application dated 22.01.2020, before the Authority: - i. Whether the subsidized shared transpo....
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....ated above, the activity under consideration is not a supply and accordingly, the value of the transport facility arranged by the applicant, under the terms of employment contract, through the third party vendor shall be nil. 5.4) As regard to the service classification of the activity, the applicant has submitted that, if the activity is treated as 'supply of service' then it is not clear that under which service classification would the activity fall. 5.5) With reference to the person liable to pay the GST and applicable rate, the applicant has submitted that the value of the activity of providing transport facility to its employees under contractual obligation, with reference to the payment of GST, would be Nil and accordingly, there will be no GST liability on the said amount. 6). The applicant was granted a virtual hearing on 26.06.2020 through video conferencing. Shri Rakesh Nanda, Chartered Accountant/ Authorized representative of the applicant attended the virtual hearing. During the hearing, the authorized representative reiterated the submissions already made vide application dated 22.01.2020 and also submitted sample copies of invoice, issued by various tour o....
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.... under question 2 above? 11). The first question before us to decide is to whether the subsidized shared transport facility provided by the applicant to its employees, in terms of employment contract, is a "Supply of service" by the applicant to its employees. 12). In this regard, we observe that Section 7(1) of the CGST Act 2017 defines the term "Supply" as: "7. (1) For the purpose of this Act, the expression "supply" includes- a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; b) import of services for a consideration whether or not in the course or furtherance of business; and,; c) the activities specified in Schedule I, made or agreed to be made without a consideration; d) the activities to be treated as supply of goods or supply of service as referred to in Schedule II. 13). Further, as per "Schedule II", as referred in the Section 7 of the CGST Act, 2017, the following activities to be treated as supply of goods or supply of service:- "1. Transfer:- (a) any transfer of the title in go....
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....xplanation.-For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure; (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software; (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and (f) transfer of the right to use any goods for any purpose (whether or n....
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....ation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;". 16). From the details/documents provided by the party, we observe that the applicant is transferring the entire amount collected from their employees, to the third party vendor who is providing transport services to their employees. We also observe that the applicant, in his application, has informed that apart from subsidized amount collected from the employees, they are also adding up a considerable amount into it and then paying it to the third party vendor. The applicant is not retaining any amount collected from the employees towards said transportation charges. We further observe that the applicant is in the business of software development and staff augmentation services and not in the business of providing transport service. Rather, this is a facility provided to their employees under the obligation of Law of the Land. Moreover, this activity is not integrally connected to the functioning of their b....