TaxTMI 
TaxTMI 
2023 (4) TMI 297
X X X X Extracts X X X X
X X X X Extracts X X X X
....d canteen service providers [for short - CSP] on contract basis. As per the arrangement with the CSP, the applicant provides utensils like tea urns, glass tumblers, eating plates, steel bowls and other utensils necessary for the preparation of food & serving the same. The CSP raises invoices along with applicable GST [if registered] for its canteen services. The invoices are based on the consumption, tracked on the biometric punching by the employees, availing the canteen facility. The employees bear 50% canteen charges while the remaining 50% is borne by the applicant on behalf of their employees. Further, it is the applicant's contention that the amount collected from the employees is without any commercial objective, without profit margin and is credited to expense account while the applicant treats the canteen expense by booking it as an expense in their P&L account. 5. The applicant, relying on the press release dated 10.7.2017 & CBIC's Circular no. 172/4/2022-GST has further contended that:- • perquisites, though not defined are benefit or facility provided by the employer to their employee in terms of contractual agreement entered into between them on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere recovery of employees portion from employee's salary and payment thereof to CSP; • that vide the present application, ruling is sought qua the applicants own employees and not for third party contractors workers - both in respect of taxability and input tax credit eligibility; • that as per the Factories Act read with the Gujarat Factories Rules, 1963, the applicant is statutorily mandated to ensure that the canteen facility is made available within its factory premises; • that the ruling in the case of Tube Investment of India Ltd [2022-VIL-298-AAR] is not applicable to the facts of their case. 7. The applicant has filed this application for advance ruling to ascertain the GST implication on the existing arrangement of canteen facility being provided to the employees at the factory by raising the following question for advance ruling viz,- (i) Whether GST is applicable on the amount representing the employee's portion of canteen charges recovered/collected by the applicant from its employees and paid to the canteen service provider on behalf of the employee. (ii) Whether the Company is eligible to take the inp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and the supply of activities or transactions inter se shall be deemed to take place from one such person to another ;} (b) import of services for a consideration whether or not in the course or furtherance of business; ^2[****] and (c) the activities specified in Schedule I, made or agreed to he made without a consideration; ^3[****] (d) ^4[*****] ^5[(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall he treated either as supply of goods or supply of services as referred to in Schedule II.] (2) Notwithstanding anything contained in sub-section (1),- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may he notified by the Government on the recommendations of the Council. shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that if such services are provided free of charge to all the employees by the employer then the same will not he subjected to GST, provided appropriate GST was paid when procured by the employer. The same would hold true for free housing to the employees, when the same is provided in terms of the contract between the employer and employee and is part and parcel of the cost-to-company (C2C). • Circular No. 172/04/2022-GST S.No. Issue Clarification 3. Whether the proviso at the end of clause (b) of subsection (5) of section 17 of the CGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? 1. Vide the Central Goods and Service Tax (Amendment Act) 2018, clause (b) of subsection (5) of section 17 of the CGST Act was substituted with effect from 01.02.2019. After the said substitution, the proviso after sub clause (iii) of clause (b) of sub-sect ion (5) of section 17 of the CGST Act provides as under: "Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upply' of goods/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. The exception being Schedule I, which include the activities made or agreed to be made without a consideration and Schedule III, which includes activities which shall be treated neither as a supply of goods or services. The applicant's case is that they employ more than 250 persons who are full time employees and who have been provided with canteen facility in terms of section 46 of the Factories Act, 1948 read with Gujarat Factories Rules, 1963. We find that the applicant is paying GST @ 5% in terms of the invoices raised by the CSP. The applicants primary role is that he provides a demarcated space and that the amount is paid by him to the CSP [a part of which is collected from the employees] on behalf of the employees for administrative convenience. 14. Now in terms of Circular No. 172/04/2022-GST, it is clarified that perquisites provided by the 'employer' to the 'employee' in terms of contractual agreement entered into between the employer and ....