TaxTMI 
TaxTMI 
2022 (10) TMI 305
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....CE SRF hereby appoints the Service Provider for providing Industrial catering food & beverage services as mentioned herein and as per the terms and conditions and the Scope of Work ("SOW") more particularly described in Schedule I for the location/s listed in Schedule 2 ("Site ") on an exclusive basis ("Services") for the Term (as defined below) and the Service Provider hereby agrees to provide the services as per the minimum service levels, being the minimum acceptable levels of performance of the services by the Service Provider during the Term of Agreement as provided in Schedule 3 ("Minimum service levels/ MSLs") in accordance with the terms of this Agreement. Both the parties agree that as and when services are desired by SRF, the services will be added to the current SOW by way of an additional SOW along with the relevant terms and conditions of such additional services. In the event of a conflict between the terms and conditions of this Agreement and Statement of Work ("SOW"), the provisions of the Agreement shall prevail. The Service Provider willingly undertakes and accepts the service and assures SFR that they will perform the services at all stages in according to the ....
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....ay (With dip-dip tea bag) Nescafe, Sugar cubes Tray of one cup 10.15 5% increase on existing rate 10.20 Tray of two cup 18.00 5% increase on existing rate 18.90 Coffee- 100 ml 1 6.50 5% increase on existing rate 6.83 Milk-100 ml 1 6.50 5% increase on existing rate 6.83 Wet Snacks- 70-100gms Bhajia/ Batata Vada/Samosa/cutlet/Idli/Khaman/Upma etc 1 12.00 5% increase on existing rate 12.60 Dry Snacks- 70 gms Chevda/Ghatia/ Ratlami/ Sev/Tikki Sev/ Shakkar para/ Mixture/ Dal Moth etc 1 12.00 5% increase on existing rate 12.60 Biscuits/ Cold Drink/ Mineral water/ Namkeen/ wafers On MRP On MRP On MRP Meals (Lunch/ Dinner) 1. Roti/Puri/Paratha 125 gm 2. Rice/ Khichdi/ Pulao 125 gm 3. Kathol 100 gm 4. Seasonal Vegetable 100 gm 5. Dal/Kadhi 100 gm 6. Salad/ Pickle 15/5 gm 7. Curd/ Buttermil 50/150 ml 8. Papad/ Fry urns (small) 1 nos. 9. Sweet (once a week only) 10. 50/100gm 1 45.00 5% increase on existing rate 47.25 Monthly fixed Cost-Paid (Holidays, Pickle, Saunf etc), Food transport vehicle etc (Detailed breakup as per below) a) Transportation Charges- 24000.00 b) Cleaning Charges-12000.00 c) Pickle &....
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....dy reference:- POLICY Providing Canteen facility to employees at FCB & SCB Dahej PURPOSE To provide wholesome meal, tea and snacks to employees on duty ELIGIBILITY All employees at FCB & SCB Dahej RULES * Tea and Snacks will be served at main canteen and all the snacks' points located at various locations at plant. The current timings are mentioned below. * The company provides 70% subsidy on items prepared in the canteen and 30% of the cost will be borne by employee. This recovery will be done from monthly salary based upon actual number of Meals/Snacks consumed by employee. * Current rate of subsidy cost is as below Meal Type Recovery Amount in Rs Lunch/Dinner 13.5/- Breakfast/Evening or Night Snacks 3.6/- * Also, there is facility of Tuck-shop in main canteen where employee can purchase packaged food and beverages on MRP basis. There will be no subsidy on these items and payment towards purchasing of these items needs to be made directly to the vendor. Canteen Details * Weekly menu would be displayed on the Canteen notice board. It would be decided by the canteen committee members from time to time. ........................... RECOVERY OF THE SUBSID....
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....her own, in that case monthly recovery will be stopped from next payroll cycle. * Any change of address in his/her tenure with FCB and SCB, to be informed to Admin. Based on the same a new pick-up point, if applicable, will be communicated by Admin. ANNEXURE * Declaration form for change in address 4.1 In order to provide this facility to the employees of the company, the applicant has entered into contract with 3rd party service vendors, namely, M/s Divya Travels (Agreement dated 01 April 2019), M/s Morlidhar Travels (Agreement dated 01 April 2019) and M/s Theme Logistics and Management Pvt. Ltd. (Agreement dated 01 January 2020), (hereinafter referred to as 'the transporters ). 5. The applicant has submitted that the service of bus transportation is being provided to the employees of the company and not by the applicant to its employees; as a part of its HR policy, merely arranging for bus transportation facility at a subsidized nominal rate for the comfort and ease of its employees; bus transporters are raising monthly invoices along with GST thereon (as per rates fixed in advance in accordance with the agreement) to the Applicant and a small portion of such charges a....
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.... part of sum to be paid to 3rd party canteen service provider which is paid as it is without retaining any portion thereof or charging any markup therein. Accordingly, in absence of Applicant being service provider, no GST liability must arise on the part recovery made by the Applicant from its employees towards canteen charges. Furthermore, it is submitted that such services have already been charged to GST as 3rd party canteen service provider raised the invoice for its services alongwith GST and thus, such canteen services provided to the employee have already been subjected to GST for which only a part is being recovered by the Applicant from its employees now. c. Business of the Applicant is not that of providing canteen or outdoor catering services - It is further submitted that applicant company is a multi-business chemicals conglomerate engaged in the manufacturing of industrial and specialty intermediates. The company's business portfolio covers fluorochemicals, specialty chemicals, packaging films, technical textiles, coated and laminated fabrics. Therefore. Applicant is not engaged in the field of provisioning of catering services. Basis this, it is of the view o....
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....ere general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same general kind or class as those specifically mentioned. It is a canon of statutory construction, where general words follow the enumeration of particular classes of things, the general words will be construed as applying only to things of the same general class as those enumerated." (Emphasis Supplied) (b) Any activity which is in connection with or incidental or ancillary to the activities prescribed under clause (a) - The impugned facility can neither be said to be in connection with trade, commerce etc, nor incidental or ancillary to the principal business activity of the company. (c) Any activity or transaction which is in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction -Since, the clause (a) is not attracted, the question of applicability of clause (c) does not arise at all. 7. The applicant has placed reliance on the following rulings of various Advance Ruling A....
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.... discussed and held as under: 5.3 Question No. 1 : Whether the GST would be payable on recoveries made from the employees towards providing canteen facility at subsidized rates in the factory and office? 5.3.1 .......................... 5.3.2 ......................... 5.3.3 In terms of section 7 of the Central Goods and Services Tax Act, 2017 (CGST Act), for a transaction to qualify as supply, it should essentially be made in the course or furtherance of business. We find that, the applicant is engaged in the business of developing, manufacturing and marketing a broad range of pharmaceutical products from its various manufacturing units, Research and Development Centres and branch offices. The employees are vital resources to carry out the day-to-day affairs of the Applicant Company. Accordingly, in order to carry out its business of output supply mentioned above, the Applicant is providing canteen facility to its employees. The provision of canteen facility to the employees is a welfare measure, also mandated by the Factories Act and is not at all connected to the functioning of their business of developing, manufacturing and marketing pharmaceutical products. Further, the....
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....ng of their business. Further, the said activity is not a factor which will take the applicant's business activity forward. 5.4.3 We also find that the applicant is not supplying any bus transportation service to its employees in the instant case. Further, Bus transportation service is also not the output service of the applicant since they are not in the business of providing transport service. Rather, this bus transportation facility is provided to employees by the third party vendors and not by the applicant. Therefore, in the subject case, the applicant is not providing bus transportation facility to its employees, in fact the applicant is a receiver of such services. 5.4.4 We observe that the GST is discharged on the gross value of bills raised on the applicant by the third party vendors. We also observe that the partial amounts recovered by the applicant from its employees in respect of use of such bus transportation facility are a part of the amount paid to the third party vendors which has already suffered GST. 5.4.5 In the case of an application filed by Tata Motors Ltd., In re [2020] 119 taxmann.com 106/82 GST 685 (AAR - Maharashtra) a similar question was raise....
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....ceuticals Pvt. Ltd., cited in 2021 (9) TMI 1293 (AAAR- GUJARAT) "FINDINGS:- 5. We have considered the submissions made by the appellant in the appeal filed by them as well as at the time of personal hearing, Ruling given by the GA AR and other evidences available on record. 6. In the present case, as submitted by the appellant, it has provided/ arranged a canteen for its employees, which is run by a third party i.e. Canteen Service Provider. The Canteen Service Provider supplies foodstuffs to the employees of the appellant against consideration and pays applicable Goods and Services Tax thereon. However, in respect of the consideration being paid to the Canteen Service Provider, as per the agreed arrangements between the appellant and its employees, part of that consideration / amount is borne by the appellant whereas the remaining part is borne by its employees. The employees 'portion of consideration / amount to be paid to the Canteen Service Provider is collected by the appellant and the consolidated amount of consideration (employees 'portion as well as appellant's portion) is paid to the Canteen Service Provider by the appellant. The query raised in the prese....
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....ing No. GUJ/GAAR/R/50/2020 dated 30.07.2020 issued by the GAAR, by holding that the Goods and Services Tax is not applicable on the collection, by the appellant, of employees 'portion of amount towards foodstuff supplied by the third party / Canteen Service Provider." (Emphasis Supplied) (iii) In Dishman Carbogen Amcis Ltd., cited in [2021| 132 taxmann.com 13 (AAR - GUJARAT) - "FINDINGS:- 3. We have carefully considered all the submissions made by the applicant. We find that the applicant has arranged a canteen for its employees, which is run by a third party Canteen Service Provider. As per their arrangement, part of the Canteen charges is borne by the applicant whereas the remaining part is borne by its employees. The said employees' portion canteen charges is collected by the applicant and paid to the Canteen Service Provider. The applicant submitted that it does not retain with itself any profit margin in this activity of collecting employees' portion of canteen charges. This activity carried out by applicant is without consideration. Thus, we pass the Ruling: RULING GST, at the hands on the applicant, is not leviable on the amount representing the employee....
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....ule I and Schedule II, which means even if it is supply u/s 7( 1), no tax will be payable in view of provisions contained in clause 1 of Schedule III. 5. We have considered the submissions made by the appellant in the appeal filed by them as well as at the time of personal hearing, Ruling given by the MPAAR and other evidences available on record. 6. In the present case, as submitted by the appellant, it has provided / arranged a canteen for its employees, which is run by a third party i.e. Canteen Service Provider. The Canteen Service Provider supplies foodstuffs to the employees of the appellant against consideration and pays applicable Goods and Services Tax thereon. However, in respect of the consideration being paid to the Canteen Service Provider, as per the agreed arrangements between the appellant and its employees, part of that consideration / amount is borne by the appellant whereas the remaining part is borne by its employees. The employees' portion of consideration / amount to be paid to the Canteen Service Provider is collected by the appellant and the consolidated amount of consideration (employees" portion as well as appellant's portion) is paid to the Cant....
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....appellant by holding that the Goods and Services Tax is not applicable on the collection, by the appellant of employees' portion of amount towards foodstuff supplied by the third party / Canteen Service Provider." (Emphasis Supplied) (v) Tata Motors Ltd., cited in [2021] 129 taxmann.com 277 (AAR - GUJARAT) "7.7 We pronounce the Ruling: RULING ... 2. GST, at the hands on the applicant, is not leviable on the amount representing the employees portion of canteen charges, which is collected by the applicant and paid to the canteen service provider." (vi) In re: Cadila Healthcare Limited, cited in 2022 [4] TMI 1339 (AAR-GUJARAT) Findings: 8.. We find that M/s Cadila has arranged a Canteen for its employees, which is run by a canteen service provider. As per their arrangement, part of the canteen charges is borne by M/s Cadila whereas the remaining part is borne by its employees. The said employees ' portion canteen charges is collected by M/s Cadila and paid to the canteen service provider. M/s Cadila submitted that it does not retain with itself any profit margin in this activity of collecting employees ' portion of canteen charges. We are not inclined to accor....
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....: (i) North Shore Technologies Pvt. Ltd., cited in [2021] 125 taxmann.com 363 (AAR -UTTAR PRADESH) - "3. As per the application for advance ruling filed by the applicant, 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. .......................... 5. Accordingly, the following questions have been asked by the applicant, in his application dated 22-1-2020, before the Authority:- i. Whether the subsidized shared transport facility provided to employees in terms of employment contract through third party vendors, would be construed as "Supply of service" by the company to its employees? ii. If the answer to above question is in affirmative, how the value of subsidized shared transport facility provided to employees under ....
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....vered can he treated as amount received for service rendered, since this entire amount is paid to the insurance company which is providing mediclaim facilities to the employees and their parents. Such recovery of 50% premium amounts by the applicant from their employees cannot be supply of service under the GST laws." Observing this, the Authority has ruled that: 'The recovery of Parents Health Insurance expenses from employee does not amount to "supply of Service" under the GST Law....' 18. We also observe that this authority has previously, in the case of Ion Trading India (P.) Ltd., In re [2020] 113 taxmann.com 609/78 GST 464 (AAR - Uttar Pradesh), ruled that the amount recovered from the employees towards parental insurance premium payable to the insurance company would not he deemed as "Supply of service" by the applicant to its employees. Moreover, we also observe that the CBIC, in its press release dated 10-7-2017, has clarified that "the supply by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subject to GST. In this regard, we observe that the applicant has submitted the copies of....
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....nor a supply of services. Since the applicant is not supplying any services to its employees, in view of Schedule III mentioned above, we are of the opinion that GST is not applicable on the nominal amounts recovered by Applicants from their employees in the subject case." (iii) Integrated Decisions & Systems India Pvt. Ltd., bearing no. GST-ARA-116/2019-20/B- 113 dated 16 December 2021 Conclusion Thus, in view of above submissions and case laws/rulings cited supra, Applicant is of the view that both the charges recovered by the Applicant from its employees are not covered under the scope of 'supply' defined under Section 7 of CGST Act, 2017, as amended, since Applicant is not rendering these services to its employees and instead, 3rd party service vendors are providing these services to the employees. Accordingly, in Applicant's interpretation of law, no GST liability arises thereupon. 10. Question on which Advance Ruling sought: 1. Whether GST would be payable on nominal & subsidized recoveries made by the Applicant from its employees towards - (i) Provision of canteen facility by 3rd party service provider to Applicant's employees at Applicant's p....
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....ion service to its employees in the instant case. Further Bus transportation service is also not the output service of the applicant since they are not in the business of providing transport service. Rather, this bus transportation facility is provided, to the employees by the third party vendors and not by the applicant. Therefore in the subject case, the applicant is not provider of bus transportation facility to its employees, in fact the applicant is a receiver of such services. 15.1 We observe that as per the contract with transporter gross value of 'bills raised by the transporter on the applicant. The applicant company as per its HR policy recovered the partial amount from the employees and remaining amount is borne by the applicant. The applicant has issued an internal policy document bearing no. FCB & SCB(D)/JET/PP/25.2 dated 01 April 2016 within the company for all the employees working at FCB & SCB (Dahej) wherein it is mentioned under the Rules ' that the transport is available at subsidized rates. Relevant extract of the policy document has been verbatim reproduced as under - POLICY To provide transport facility to the employees of FCB & SCB (Dahej) PURPOS....