TaxTMI 
TaxTMI 
2024 (1) TMI 703
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....de canteen facilities to their workers at their factory premises. 4. As per the agreed arrangement with the CSP, the applicant allows the CSP to use utensils like tea urns, glass tumblers, eating plates, steel bowls and other utensils necessary for the preparation of food and serving foods items at the canteen. The CSP raises the invoice along with applicable GST for its canteen services. The invoice is raised by the CSP on the basis of the consumption by the employees of the applicant, which is tracked based on employees of the applicant who avail the canteen facility. A part of the canteen charges is borne by the applicant whereas the remaining part is borne by their employees. 5. The employees' portion of canteen charges is collected from employee's salaries and paid to the CSP by the applicant on behalf of employees. The amount so collected is without any commercial objective, or profit margin and to maintain discipline. The applicant accounts the canteen expense basis the invoice raised by the CSP in its statement of profit and loss account. Further, the amount collected by the applicant from its employees, is credited to the expense account in which the canteen expenses....
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....ract exists between the applicant & the employees for setting up of canteen facility; • that they wish to rely on the ruling in the case of M/s. Amneal Pharmaceuticals P Ltd, (Appeal No. Guj/GAAR/Appeal/2021/07 dtd 8.3.2021) M/s. Tata Motors, (Ruling no. Guj/GAAR/R/39/2021 dtd 30.7.21) M/s. Emcure Pharmaceuticals Ltd, (Ruling no. GST-ARA-119/2019-20/B-03 dtd 4.1.2022) Troikaa Pharmaceuticals Ltd, (Ruling number Guj/GAAR/R/2022/38 dtd 10.8.2022) M/s. Munashi Auto Parts India P Ltd, (Appeal No. HAAAR/2020-21/061 dtd 31.3.2022) M/s. Cadila Health Care Ltd. (Ruling No. Guj/GAAR/R/2022/19 did 12.4.2022) M/s. Astral Ltd, (Ruling no. Guj/GAAR/R/2022/01 dtd 7.3.2022) M/s. Intas Pharmaceutical Ltd, (Ruling No Guj/GAAR/R/2022/03 did 7.3 2022) M/s. AIA Engineering Ltd, (Ruling No. Guj/GAAR/R/2023/12 dtd 31.3.2023) M/s. Cadila Pharmaceuticals Ltd. (Ruling No. Guj/GAAR/R/2023/14 dtd 31.3.2023) 7. The applicant has filed this application for advance ruling raising the following questions viz (i) Whether the subsidized deduction made by the applicant from the employees who are ultima....
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....ecifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 10. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 11. Before adverting to the submissions made by the applicant, we would like to reproduce the relevant sections, circular, press release etc., for ease of reference: • Section 7. Scope of supply.- (1) For the purposes 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; ^1[(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or....
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....smetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply: (ii) membership of a club, health and fitness centre; and (iii) travel benefits extended to employees on vacation such as leave or home travel concession: 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 any law for the time being in force] • CBIC's press release dated 10.7.2017 Another issue is the taxation of perquisites. It is pertinent to point out here that the services by an employee to the employer in the course of or in relation to his emplo....
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....se (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the whole of clause (b) of sub-section (5) of section 17 of the CGST Act. 5 Whether various perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are liable for GST? 1. Schedule Ill to the CGST Act provides that "services by employee to the employer in the course of or in relation to his employment" will not be considered as supply of goods or services and hence GST is not applicable on services rendered by employee to employer provided they are in the course of or in relation to employment. 2. Any perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are in lieu of the services provided by employee to the employer in relation to his employment. It follows there from that perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and emp....
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.... 16. The next question on which the applicant has sought ruling is whether Input Tax Credit of GST charged by the CSP would be eligible for availment by the applicant. In this connection, before proceeding further, certain factual aspects which we would like to mention, though at the cost of repetition are viz • that they employ 1500 employees; • that section 17(5)(b) ibid, was amended on 1.2.2019, and is reproduced supra', • that the applicant is mandated vide section 46 of the Factories Act, 1948 to provide canteen facility to its employees within the factory premises; • that Circular no. 172/4/2022-GST clearly clarifies that post substitution, effective from 1.2.2019, based on the recommendation of the GST council in its 28th meeting, the proviso after sub clause (iii) of clause (b) of Section 17(5) of the GGST Act, 2017 is applicable to the whole of clause 17(5)(b), ibid. 17. In view of the foregoing, we hold that Input Tax Credit will be available to the appellant in respect of food and beverages as canteen facility is obligatorily to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963 ....