AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 203
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....parel India Private Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: 3.1 M/s Brandix Apparel India Private Limited (hereinafter referred to as "applicant") Is engaged the business of manufacture of apparels and export of the same outside India. Applicant is having GST Registration number 37AACCB6569L1Z5. 3.2 The applicant has hired a third-party contractor for providing canteen services to the employees in the factory. The third-party contractor raises an invoice on the company for provision of canteen services and recovered amount form the employees for provisions canteen facility. The total amount charged by the canteen service provider per employee per month is Rs.1,538.25/-. Out of the total canteen expense Rs.578/- - is recovered from each employee per month and the applicant bears the cost of balance INR 960.25 per month per employee. 3.3 The applicant has hired a contractor for providing transportation services to the employees of the company transport services per employee per month. The total amount charged by the bus transport service per employee Rs.2,277/-.Out of the total transportat....
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....society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members f) admission, for a consideration, of persons to any premises; g) services supplied by a person as the holder of an office which has been accepted by him in the course of furtherance of his trade, profession or vocation; h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed 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; B) The applicant submits that the above definition, the term business broadly means any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity whether or not it is for pecuniary benefit. C) The applicant in the present case is engaged in the business of manufacture of apparels and not in the business of providing canteen facility. However, since employees are the vital resources to carry out day to day functioning of the business, the applicant provides the canteen facility as a welfare measure....
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.... it a Supply by M/s Cadila to its employees. We pass the Ruling: GST, at the hands of the M/s Cadila, is not leviable on the amount representing the employees' portion of canteen charges, which is collected by M/s Cadila and paid to the Canteen service provider" 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 MI 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. The applicant submits further that the Madhya Pradesh Appellate Authority of Advance Ruling has also taken a similar view in the case of M/s Bharat Oman Refineries Limited [Order No. MP/AAAR/07 /2021 dated 8 November 2021]. The relevant extract is reproduced below for reference: "...However, at point no.3 we have held that canteen services would not be leviable to GST at the hands of the employer because of our ....
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....t applicable on the activity of collection of employees' portion of amount by the appellant, without making any supply of goods or service by the appellant to its employees." The Gujarat Authority of Advance Puling has taken a similar stand in the Case of M/s Dishman Carbogen Amcis Ltd, (GUJ/GAAR/R/22/2021 dated 9 July 2021], The relevant extract is as below; "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: 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....
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....is the above it can be inferred that when any service is provided by employer to employee which becomes part of the cost to company then such services can be said to be provided under employer-employee relationship and would be outside the purview of GST. Once employee ceases to be in employment with Applicant, he/she is not authorized to use the canteen facility. In other words, employer-employee relationship is must to avail this facility. b) The Applicant would like to rely on the judgement by the Andhra Pradesh High Court in the case of M/s Bhimas Hotels Pvt Ltd. vs the Union of India, Ministry of Finance [2017 (4) TMI 860] under the Service Tax regime wherein the High Court had held that food supplied by an employer to its employees at a subsidized rate forms part of the wages under the Industrial Disputes Act, 1947 and should not be taxable as a service, The relevant extract of the judgement has been highlighted below for reference-"As a matter of fact, any supply of subsidized food to the workers by the management of a Company, has to be seen as part of the pay package that the workers have negotiated with the employer. Under the Factories Act, 1948 and even under the Indu....
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....thorized to use the transportation facility. In other words, employer-employee relationship is must to avail this facility.... In the subject case, the transaction between the applicant Ft their employees, due to "Employer-Employee" relation as stated by the applicant in their submissions, is not a supply under GST Act. To answer the second question we now refer to Schedule III to the CGST Act which lists activities which shall be treated neither as a supply of goods nor a supply of services As per clause 1 of the said Schedule-Ill, Services by an employee to the employer in the course of or in relation to his employment shall he treated neither as a supply of goods 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 amounts recovered by Applicants from their employees in the subject case." 2) Uttar Pradesh Authority of Advance Ruling in case of M/s North Shore Technologies Pvt Ltd. [Order No. 59 dated 29 June 2020] "From the details/ documents provided by the party, we observe that the applicant is transferring the entire amount collected....
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.... facility provided by the Applicant to its employees cannot be said to be made in the course or furtherance of business. Therefore, the above advance rulings are squarely applicable to our instant case. In light of the above submission, we pray for the following to hold that GST is not payable on canteen and bus transportation recovery made from employees. The Applicant request you to grant personal hearing, further, the Applicant craves leave of your goods self to any additional submissions during and before personal heating. 6. Personal Hearing: The proceedings of Personal Hearing were conducted on 11.01.2023, for which the authorized representative, Rajitha B, partner attended and reiterated the submissions already made. 7. Discussion and Findings: We have considered the submissions made by the applicant in their application for Advance Ruling. We have considered the Issues Involved from which Advance Ruling is sought by the applicant and the relevant facts along with arguments made by the applicant and also their submissions made during the time of the personal hearing. We analyse the applicant's submission and pass our ruling accordingly in the following paras. 7.1 T....