TaxTMI 
TaxTMI 
2024 (6) TMI 222
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....e CSP. 4. Further, the applicant states that in terms of section 46 of the Factories Act, 1948, since they have employed more than 500 employees, they are mandated to provide canteen for their employees; that they have ultimate control over the affairs of the factory & would be considered as an 'occupier'; that they have setup a canteen facility having a separately demarcated area in the factory premises pursuant to & in compliance with the Factories Act; that the canteen facility has seating area with tables and chairs, cooking facility with utensils, refrigeration, storage rooms for keeping the cooked food, washrooms and wash basin, etc.. 5. The applicant has further contended as follows: No GST on canteen facility • that the detail of food consumed & details of employee is maintained by the applicant; that based on the record of food consumed, the CSP raises an invoice; that after termination of employment services, the employee is not allowed access to canteen facilities; • that deduction of the nominal amount from employees would become taxable under GST only if such amount qualities as 'consideration' towards supply as defined u/s 7 of the C....
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.... provided in pursuance of applicants obligation to provide such facilities to its employees in the capacity of an occupier of the factory under the Factories Act; • that in terms of circular no. 172/04/2022-GST dated 6.7.22, it is clarified that the proviso at the end of clause (b) of section 17 (5), ibid, is applicable to the entire clause 17 (5) (b), ibid; • the circular clarifies that ITC on food & beverages, etc., covered u/s 17 (5), would not be restricted provided it is obligatory for an employer to provide the same to its employees under the law; • that in respect of the aforementioned issues on which ruling is sought, they wish to rely on the below mentioned case laws/rulings: [a] Amneal Pharmaceuticals P Ltd [GUJ/GAAR/R/50/2020 dtd 30.7.20] [b] Bal Mumbai Trust [Commercial suit (I) MP/ 236/2017] [c] TATA Motors Ltd [Guj/GAAR/R/39/2021 dtd 30.7.2021] [d] TATA Motors Ltd [GST-ARA-23/2019-20/B-46] [e] Posco India Pune Processing Centre P Ltd [GST-ARA 36/18-19/B-1 10] [f] Jotun India P Ltd [2019 (10) TMI 482] [g] Cinemax India Ltd [SCA 8032/2011] [h] Raipur Manufactur....
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....he CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically 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 provisions/circular for ease of reference: • 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; [(aa) the activities or transactions, by a person, other than an individual, t....
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....ery, 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 employment is outside the scope o....
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....) 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 III 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 therefrom 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 employee. 12. The fac....
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....eractions with the Canteen Manager for the smooth functioning of the canteen service. Canteen Facility Guidelines: a. Canteen facilities will be provided to all Dormer India employees. b. The menu for the week will be decided and communicated to the Canteen contractor by the Canteen Committee and the same will be displayed on the board for everyone's knowledge. c. This is a subsidized canteen facility and certain amount will be deducted from the salary every month from all employees. d. There will be a monthly meeting on the canteen service with the Canteen contractor and Canteen committee. The communication of the meeting outcome will be communicated to the concerned by the committee. e. Canteen contractor ensures the quality of the raw material and storage at the proper place with proper housekeeping and pest control measures. FIFO system should be adopted to ensure consumption of raw material in the right manner. f. Canteen contractor and maintenance team should have common observation round in the canteen for the equipment's and the facilities provided to the canteen contractor are used properly and maintained as pe....