TaxTMI 
TaxTMI 
2024 (6) TMI 224
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....provided and maintained by the occupier for the use of the workers. Thus, by virtue of section 46 of the Factories Act, the applicant provides meals which include breakfast, lunch, snacks and dinner to its employees. 4. The applicant provides canteen facilities to its employees in terms of the canteen policy dated 16.08.2023. In terms of the canteen policy, the applicant is deducting Rs. 260/- per month from the salary of the employees towards the meals provided in the canteen and the remaining cost is borne by the applicant. 5. In addition to above, the applicant is also providing canteen facility to Supervised Contract Employees and Third-Party Employees. In the case of Supervised Contract Employees and Third-Party Employees, the applicant recovers Rs. 260/- per month per employee from contractors/manpower supply company respectively along with GST at the rate of 5% under SAC 9963. The remaining cost of the meal is borne by the applicant. 6. The applicant has attached the Purchase Order issued to the CSP as Annexure 1, Canteen Policy as Annexure 2, a sample copy of the tax invoice issued by CSP as Annexure 3 and a sample copy of the tax invoice raised by the applicant fo....
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....ame to its employees under any law for the time being in force; • that the canteen facility to its employees is in furtherance of its obligations under Factories Act; that the restrictions, imposed u/s 17 (5), ibid, is not applicable in the instant case since the canteen facility is extended to its employees as a part of its statutory obligations under the provisions of Factories Act; • that they would like to rely on the below mentioned rulings/circular which substantiate their averment that applicant is eligible to avail ITC on input service of canteen; • M/s Troikaa Pharmaceuticals Limited; • Bharat Oman Refineries Lt: • M/s EIMCO Elecon India Limited reported at 2023 (9) TMI 164; • M/S. Tata Autocomp Systems Ltd reported at 2023 (7) TMI 142; • M/S. Cadila Pharmaceuticals Ltd reported at 2023 (4) TMI 298; • M/S. AIA Engineering Limited reported at 2023 (4) TMI 297; • Tata Motors Ltd. reported at [20231 146 taxmann.com 356 (AAAR-GUJARAT) 8. The applicant has further procured services of renting/hiring of motor vehicle having a seating capacity of less than 13 pe....
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....discharged on the transportation facility provided by Applicant to its employees? iii. Whether the Applicant is eligible to avail input tax credit of the GST charged by the canteen service provider for the canteen facility provided to its employees? 12. Personal hearing was granted on 24.04.2024 wherein Miss Priyanka Kalwani, Advocate and Miss Aanchal Kesari appeared on behalf of the applicant and reiterated the facts as stated in the application. On being asked they informed that the ruling sought is for permanent employees and they have more than 250 employees on payroll. Discussion and findings 13. At the outset, we would like to state that the provisions of both the 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. 14. 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'....
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.... of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. * 17. Apportionment of credit and blocked credits. [relevant extracts] (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely: (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) ... .... .... .... .... ...; (ab) ... .... .... .... .... ...; (b) [the following supply of goods or services or both- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic 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....
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....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 any law for the time being in force." 2. The said amendment in sub-section (5) of section 17 of the CGST Act was made based on the recommendations of GST Council in its 28th meeting. The intent of the said amendment in sub-section (5) of section 17, as recommended by the GST Council in its 28th meeting, was made known to the trade and industry through the Press Note on Recommendations made during the 28th meeting of the GST Council, dated 21.07.2018. It had been clarified "that scope of input tax credit is being widened, and it would now be made available in respect of Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force." 3. Accordingly, it is clarified that the proviso after sub-clause (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 perquisit....
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....pect of permanent employees only. We therefore restrict our findings to the canteen facility being provided to permanent employees only. 18. 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 the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee. We find that factually there is no dispute as far as [a] the canteen facility is provided by the applicant as mandated in section 46 of the Factories Act, is concerned; and [b] the applicant has provided a copy of their canteen policy, the relevant paras of which is reproduced below viz Clause (3) Canteen policy c) Good nutrition and healthy eating habits are essential for employees. The purpose of this policy is to provide clarity on the administration of the canteen and its governance thereof. d) A nominal subsidized charge of 260/- Rs per month per employee is deducted from every employee's monthly pay irrespective of the facility availed or not. In view of the foregoing, we hold that the....
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....compasses is mentioned supra in para 15. 23. The applicant's contention is that since there is a dearth of transportation facilities near the location of the factory, for the convenience of its employees to commute from their residence to the factory premises and vice-versa. they are arranging transportation facility through TSP. 24. 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 the employee, will not be subjected to GST when the same is provided in terms of the contract between the employer and employee. We find that factually there is no dispute as far as the applicant has provided transport facility in terms of their transport policy, the relevant paras of which are reproduced below viz c). objective Providing transportation makes employee everyday commute hassle free and improve employee performance and overall company growth. Main objective is to ensure 1. Safety 2. Going Green 3. Hassel Free Employee Commute 4. Enhancing Employer branding 5. Coherence and....