TaxTMI 
TaxTMI 
2024 (7) TMI 981
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....ider [CSP] for preparing and supplying food to their employees. The applicant recovers Rs. 104/- on monthly basis from each employee in respect of the food being prepared and supplied by the CSP. 4. Further, the applicant states that in terms of section 46 of the Factories Act, 1948, since they have employed more than 300 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 set up 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 attached a copy of agreement executed with the CSP and copy of sample invoice as Annexure 1 and Canteen Policy as Annexure 2 with their application. 6. 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 ap....
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....¢ that they would like to rely on the below mentioned rulings/circular which substantiate their averment that no GST is leviable;- • Circular no. 172/04/2022-GST dtd 6.7.2022; • M/s Tata Motors Limited [GUJ/GAAR/R/39/2021]; • Bai Mumbai Trust and Others vs. Suchitra and others reported at [2019-VIL-454 BOM]; • M/s. Amncal Pharmaceuticals Ltd [GUJ/GAAR/R/50/2020]; • M/s. SRF Limited [GUJ/GAAR/R/41/2022]: • Posco India Pune Processing Center Private Limited [GST-ARA-36/2018-19/B-110]-Maharashtra; • M/s Jotun India Pvt Ltd [GST-ARA-19/2019-20/B-108]-Maharashtra; • M/s. Cadila Pharmaceuticals Ltd [GUJ/GAAR/R/2023/14]; • M/s. TATA Autocomp Systems Limited [GUJ/GAAR/2023/23]; • M/s. Emcure Pharmaceuticals Ltd [GST-ARA-119/2019-20/B-03 dated 4.1.22]. ITC of the GST paid by the applicant to CSP • that credit of ITC charged on supply of services would only be allowed when such goods or services or both are used or intended to be used in the course of furtherance of business; • that the CSP provides the services to the applicant in ....
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....i and Shri Nirav Shah, appeared and reiterated the facts as stated in the application. Discussion and findings 9. 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. 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: • 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, lea....
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....wing 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 [or 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 perqu....
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....loyer 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 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 there from that perquisites provided by the employer to the employee in terms of contractual agreement entered into be....
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....ation. c. The cost of the canteen deduction is as per employee category. d. The Canteen Committee will be the administrative in charge of the canteen who will have interactions with the Canteen Manager for the smooth functioning of the canteen service. Canteen Facility Guidelines:- a. Canteen facilities will be provided to all employees of the company. b. The menu for the week will be decided and communicated Io 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 who are availing the facility. 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 ensure 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 man....