TaxTMI 
TaxTMI 
2025 (4) TMI 1050
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....o. 15 of Notification No. 12/2017-Central Tax (Rate)? 4) Without prejudice, even if GST is payable in respect of aforesaid employee recoveries, what would be the value on which GST is payable? 5) This advance ruling is also sought to ascertain whether the notice pay recoveries made by the Applicant from its employees for not serving the notice period is taxable under the GST laws? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: 1.1 Ferrero India Pvt. Ltd. (hereinafter referred to as 'Applicant') is a part of the Ferrero Group engaged in the manufacture and sale of chocolate and confectionary products. The Applicant has established its corporate headquarters in World Trade Center, 8th Floor, Tower 3....
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....tation to its employees. Canteen & Bus Transportation. 1.7 The Applicant provides canteen and transportation facility to its employees at the Baramati unit based on the employment terms of the Applicant. Based on the agreed terms between the Applicant and Employees, the Applicant is entitled to make recoveries at subsidized rates for the canteen and bus transportation facility provided by the Applicant at its factory. The relevant clauses of the Long-Term Wage Settlement Agreement are extracted below: 15. It is agreed by both the parties that canteen facility will be provided to all eligible workmen agents the deduction of Rs. 10/- per day from each workman. Breakfast, lunch/dinner provided in the canteen will be vegetarian. The Manu will be decided by the existing canteen committee members. All workmen will lift their plates and water glasses after breakfast, lunch/dinner and put the left outs in the garbage bins and will put the plate and glass at the used plate window. 16. Transport Facility: It is agreed by both the parties that, the transport facility on present routes will be continued by the company and there are no additions in the bus ro....
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....on to undertake any kind of business activity. The said facilities are towards providing hygienic food and to maintain safety for the employees who work in the shifts as well as to maintain the continuity in manufacturing and research & development work. It is submitted that safety for employees and more particularly female employees is very important. Hence, the Applicant provides the bus transportation facility to ensure the safety of the employees and to provide a better working environment. Notice Pay Recovery. 1.13 Further, there are various instances where the employees decide to resign and leave the employment without serving the complete notice period. Due to sudden change in the transitioning the job role to new employee (i.e., in cases where notice period is not served), the Applicant suffers consequential losses since every employee is designated with some or the other crucial responsibility. 1.14 In this regard, it is imperative to note that in case the employee does not serve the mandated notice period, in part or in full, the Applicant is entitled to monetary compensation, hereinafter referred to as "Notice Pay Recovery" from the employee's salary payment. In....
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....etation with respect to the recoveries made from the employees for providing Canteen facilities to its employees are provided in the below grounds which are without prejudice to each other. 1.1 The employee recoveries for providing canteen facility and also for providing bus transportation service is not covered under the ambit of "supply" under Clause (a) of Section 7 (1) of the CGST Act. 1.1.1 In order to analyse the present issue, reference is made to Section 7 (1) of the CGST Act, which defines the term 'supply' as under: 7. (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; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. ......
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....rofession, vocation, adventure, wager or any other similar activity whether or not it is for pecuniary benefits. Also, as per clause (b) any activity ancillary or incidental to the activities covered under clause (a) are also treated as business. Further, clause (c) also states that any activity or transaction falling in the above categories would be business whether or not there is volume, frequency, continuity or regularity in transactions. Hence, the above definition provides that business includes any activity in the nature of trade, commerce, manufacture, etc. 1.1.5 The Applicant reiterates that 'supply' can come into existence only when there is any activity done in the course of business or furtherance of business. It is clear from the above discussion that business means any activity in the nature of trade, commerce, manufacture, etc. 1.1.6 It is submitted that the Applicant is engaged in the business of manufacture of chocolate and confectionary products. The entire business activities are aimed towards the manufacture, develop, sales, distribution, promotion of chocolate and confectionary products. The Applicant also submits that while obtaining incorporation of the....
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....acility to the employees cannot qualify as supply. 1.1.11 The Applicant also submits that the meaning of the term business should be restricted to cover only commercial activities. Any activity which is towards providing any support or service such as helping, aiding or assisting own employees cannot be treated at par with business. In the given case in hand, the provision of canteen facility is merely a facilitator function extended by the Applicant to the employees. Hence, the said activity cannot be equated with business. 1.1.12 In this regard, reliance can be placed in the case of State of Gujarat vs. Raipur Manufacturing Co. Ltd. (Civil Appeal No. 603 of 1966) wherein the Petitioner was engaged in the business of manufacturing and selling cotton textiles. The Petitioner purchased coal for usage in business of cotton textiles. The said coal was later sold by the Petitioner. The Supreme Court held that the Petitioner was not engaged in the business of coal. The operative part of the judgement is extracted below: "8. It is clear from these cases that to attribute an intention to carry on business of selling goods it is not sufficient that the assessee was carrying ....
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....which the coal came to be sold. Mere sale of a commodity which a Company requires for the purpose of its business and which has been purchased for use in that business will not justify an inference that a business of selling that commodity was intended, unless there are circumstances existing at the time when the commodity was purchased or which have come into existence later which establish such an intention. It may be pointed out that the burden of proving that the Company was carrying on business of selling coal lay upon the Sales-tax authorities and if they made no investigation and have come to the conclusion merely because of the frequency and the volume of the sales, the inference cannot be sustained." .. Emphasis Supplied 1.1.13 It is also submitted that as per clause (b) of Section 2 (17), business also includes any activity which is in connection with or incidental or ancillary to the activities covered under clause (a) of Section 2 (17) of the CGST Act. Hence, one may question as to whether the provision of canteen facility can be said to be in connection with or incidental or ancillary to the principle business of chocolate and confectionary products. 1.1.14 In....
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....aracter. 5. In this case it is difficult to say that the assessee has been carrying on business in fair price shop. We have looked into its articles of association and nowhere is there any reference to the carrying on of business in fair price shop. What appears to be probable is that the assessee in order to provide amenity to its workmen has opened the fair price shop so that commodities may be made available to them at fair price. It may be that in fact profit accrues. But that is not what is material. The question is whether the assessee meant to run the fair price shop as a trade or commerce or a commercial activity. We do not find it possible to say that the fair price shop is a commercial activity of the assessee. We hold that the assessee is not carrying on the business of selling commodities in the fair price shop in a trade or commercial sense, and that, therefore, it is not with reference to the fair price shop a dealer within the meaning of the Act." ... Emphasis Supplied 1.1.17 In the case of Panacea Biotech Limited vs. Commissioner of Trade and Taxes [(2013) 59 VST 524 (Del.)] the issue was related to whether the selling of used cars is ancillary or inc....
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....ct carriage permits for engaging in such transport. 1.1.20 As discussed in the foregoing paragraphs, the factories of the Applicant are located afar from the city of Pune. It is submitted that safety for employees is very important. Hence, the Applicant is providing the bus transportation facility to ensure the safety of the employees and to provide a better working environment. Therefore, it is submitted that the transportation facility is not the business of the Applicant. 1.1.21 It is further submitted that transportation facility provided by the Applicant to its employees is not related to or connected with the principle business of supply of chocolate and confectionary products in that manner. Hence, the activity is not even incidental or ancillary to the main business of the Applicant. Hence the Applicant cannot be asked to pay GST on transport recoveries. 1.2 Without prejudice to the above, the canteen facility and bus transportation facility provided by Applicant is excluded from the scope of supply in terms of Clause (a) of Section 7 (2) of the CGST Act. 1.2.1 The Applicant also submits that the canteen facility and bus transportation facility provided by the A....
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.... is provided not merely due to the statutory requirement, but also to provide a healthy and workable environment to all the employees of the Applicant. 1.2.6 As discussed in the above paragraphs, the Applicant is providing these facilities to the employees due to their agreed terms. The Applicant is recovering the subsidized amount of canteen facility to the employee in terms of the Agreement. Therefore, it is clearly established that the canteen facility is directly in connection with the employment of the employees. 1.2.7 Also, as per the Press release issued by the Ministry of Finance dated 10 July 2017 which states the following: "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 of GST (neither supply of goods or supply of services). It follows therefrom that supply 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. Further, the Input Tax Credit (ITC) Scheme under GST does not allow ITC of membership of a club, health a....
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....mployees. The Applicant was recovering 50% of the cost incurred by the Applicant towards the parental insurance cost of its employees. This Hon'ble Authority vide its Order No. GST-ARA-19/2019-20/B-108 Mumbai dated 04-10-2019 has ruled that the employee recovery would not be treated as 'supply' since the activity of recovering the amount from employees does not satisfy the conditions of Section 7. The below extract of the Advance Ruling is reproduced for ready reference: "(3) The issue put forth before us is very limited. We find from the documents of insurance scheme submitted on record that the applicant provides Mediclaim cover to their employees' parents. There are four types of category of scheme wherein sum insured amount for family floater is at Rs. 300000/-and premium amount is fixed as per the number of parents involved therein. The applicant will bear 50% amount for maximum 2 members only and rest of money will be paid by respective employee. It is cashless Mediclaim insurance policy for the lock-in period of 3 years. The mediclaim insurance policy is made from "The Oriental Insurance Company Ltd". Further we find from the sample copy of insurance policy submitte....
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....on to the Advance Ruling in the case of M/s POSCO India Pune Processing Centre Private Limited [2019 (2) TMI 63]. In the said case, this Hon'ble Authority was examining similar issue whether the recovery of 50% parental insurance premium amount from the employees would be treated as supply or not in order to avail Input Tax Credit of input services. This Hon'ble Authority vide Order No. GST-ARA-36/2018-19/B-110 Mumbai dated 07-09-2018, has ruled that the employee recovery would not amount to supply. The relevant extract is reproduced as below: "We find that the applicant is paying the premium towards mediclaim taken for their employees and the parents of such employees. Against such payments made they are recovering 50% from their employees. There is no way that the 50% amount recovered can be treated as amounts received for services rendered, since this entire amount is paid to the insurance company which is providing mediclaim facilities to the employees and their parents. Such recovery of 50% premium amounts by the applicant from their employees cannot be supply of services under the GST laws. In fact what is happening in this case is that since the applicant is recover....
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....mployment with Applicant, he/she is not authorized to use the transportation facility. In other words, employer-employee relationship is must to avail this facility. 5.3.2 In the subject case we find that the applicant is not providing transportation facility to its employees, in fact the applicant is a receiver of such services in the instant case. The applicant's contentions that they are eligible for exemption from GST under SI. No. 15 (b) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 in respect of nominal amounts of recoveries made from their employees to wards bus transportation service, is not correct. The exemption under the said notification is available only when the supply is taxable in the first place. In the subject case, the transaction between the applicant & their employees, due to "Employer-Employee" relation as stated by the applicant in their submissions, is not a supply under GST Act. 5.3.3 To answer the second question we now refer to Schedule III to the CGST Act which lists activities which shall be treated neither as a supply of goods nor a supply of services As per clause 1 of the said Schedule-III, Services by an employee ....
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....rance of business, and since in terms of Section 7 of the CGST Act, 2017, for a transaction to qualify as supply it should essentially be made in the course or furtherance of business, we find that the canteen services provided by the applicant to its employees cannot be considered as a "supply" under the relevant provisions of the CGST Act, 2017 and therefore the applicant is not liable to pay GST on the recoveries made from the employees towards providing canteen facility at subsidized rates. .... 5.4.8 Accordingly, we are of view that for the applicant, arranging bus transportation facility for their employees is definitely not an activity which is incidental or ancillary to the activity of developing, manufacturing and marketing of pharmaceutical products, nor can it be called an activity done in the course of or in furtherance of developing, manufacturing and marketing of pharmaceutical products as it is not integrally connected to the business in such a way that without this, the business will not function. Hence, it is held that, GST would not be payable on the recoveries made from the employees towards providing bus transportation facility." 1.3.6 Furth....
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.... of these chocolate and confectionary products. It is already submitted that the Applicant is engaged in the business of chocolate and confectionary products in Ground 3.1 above. The submissions of the Applicant made above equally apply in the case of Bus Transportation facility provided to the employees. Therefore, it is submitted that the Applicant is not engaged in the business of bus transportation and accordingly, the said facility provided by the Applicant to its employees does not amount to supply under the GST regulations. 1.2 Without prejudice to the above, the bus transportation facility provided by Applicant is excluded from the scope of supply in terms of Clause (a) of Section 7 (2) of the CGST Act. 1.2.1 The Applicant submits that the submission made by the Applicant in respect of canteen recovery in Ground-3.2 equally applies so far as the bus transportation is concerned. Therefore, it is humbly submitted that the bus transportation facility is specifically excluded from the purview of 'supply' in terms of Section 7 (2) (a) read with Schedule-III to the CGST Act. 1.3 Without prejudice to the above, it is settled position under GST regime that employee recover....
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....ot a supply under GST Act. 5.3.3 To answer the second question we now refer to Schedule III to the CGST Act which lists activities which shall be treated neither as a supply of goods nor a supply of services As per clause 1 of the said Schedule-III, Services by an employee to the employer in the course of or in relation to his employment shall he treated neither as a supply of goods nor a supply of services. 5.3.4 Since the applicant is not supplying any services to its employees, in view of Schedule III mentioned above, we are of the opinion that GST is not applicable on the nominal amounts recovered by Applicants from their employees in the subject case." ....Emphasis supplied 13.3 In view of the above, it is submitted that there should not be any GST implications on the recoveries made from the employees for providing the bus transportation facility as a part of employment contract. C. Applicant's Interpretation with respect to the applicability of exemption from GST in respect of provision of Non-AC bus transportation facility to its employees. 1.1 The Applicant reiterates that the bus transportation facility provided by the Applicant to its employ....
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....elow: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services (Rate Percent) Condition 15 Heading 9964 Transport of passengers, with or without accompanied belongings, by - (a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal; (b) non-airconditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or (c) stage carriage other than airconditioned stage carriage Nil Nil 1.6 From the above table, it is clear that, passenger transportation services via non airconditioned contract carriage, other than radio taxi is used for transportation of passenger is exempted from GST. The Applicant submits that the buses engaged in the transportation of employees are Non-AC buses. It is further submitted that the buses involved in the given case on hand is not a radio-taxi. The Applicant also submits that the buses engaged by Applicant in the given case are registered as "contract carriag....
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.... It follows, therefore, that if such services are provided free of charge to all the employees by the employer then the same will not be 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)". .....Emphasis Supplied 1.3 Based on the above understanding, it is submitted that, in case, a certain pre-decided amount of recoveries is made by the employer for providing certain facilities to its employees and rest of the non-recovered amount is treated as cost to the company, the GST will be applicable only on the recoveries made and not on the full amount charged by the supplier for providing the facility the employee. E. Applicant's Interpretation with respect to the notice pay recoveries made from the employees for not serving the notice period, are provided in the below grounds which are without prejudice to each other. 1.1 Without prejudice to the above, the notice pay recovery by Applicant is excluded from the scope of supply in terms of Clause (a) ....
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....e provider to the Applicant. 5. The notice pay recoveries made from exiting employees by the Applicant would not amount to 'supply' under GST. 03. CONTENTION - AS PER THE CONCERNED OFFICER: Officer Submission Dated: 07.04.2022 Please refer to your letter dated 09.03.2022 on the above cited subject and email dated 10.03.2022 as referred above. The reply of CGST Pune-I Commissionerate, Pune for the questions requiring Advance Ruling is as follows: Questions requiring Advance Ruling Q.1 Whether the recoveries made by the Applicant from the employees for providing canteen facility to its employees is taxable under GST laws? Ans: Yes, it is taxable supply of service under GST law as it is a supply by the Applicant to its employees and such supply is not covered by S. No. 1 under schedule III of CGST Act, 2017 which only excludes the following from GST purview: "Services by an employee to the employer in the course of or in relation to his employment. Q.2 Whether the recoveries made by the Applicant from the employees for providing bus Transport facility to its employees is taxable under the provisions of CGST Act? A....
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.... India Pvt. Ltd., Magarpatta City, Pune, Maharashtra-411028. 1. Chocolate and other Food Preparations containing Cocoa-others-HSN Code-18069090 2. Chocolate and other Food Preparations containing Cocoa-others: Spreads Containing Cocoa - HSN Code- 18069030 3. Sugar Confectionary (including white Chocolate), Not Containing Cocoa-other-HSN code-17049090 4. Bread, Pastry, cakes, Biscuits and other Bakers Wares, Whether or not containing cocoa, Communion Wafers, Empty cachets of a kind suitable for Pharmaceutical use, Sealing Wafers, Rice Paper and similar Products-sweet Biscuits, Waffles and Wafers-Coated with Chocolate or Containing Chocolate-HSN code-19053211 5. Chocolate and other food preparations containing cocoa-HSN Code-18069010 4(b) Rate of Central Excise duty as applicable. 12.5%, 6% 4(c) Details of benefit of notification of central Excise if any availed. Notification No. 49/2008 CE (NT) dated 24.12.2008. (5)(a) Classification of Service/ Services as applicable 1. Manpower Supply under RCM. 2. GTA under RCM 3. Legal Consultancy Services under RCM. 4. Rent a cab under RCM. 5. Works Contract Serv....
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.... obligation under Factories Act 1948, Applicant provides canteen facility to all the workers through a third-party Canteen Service Provider. (3) As per the 'Long-Term Wage Settlement Agreement', with the employees, the Applicant is recovering certain amounts from its employees for providing the canteen & transportation services to its employees. The same is evident from the salary slips of the employees wherein the express deductions that are recovered by the Applicant on account of food and bus transportation are mentioned. (4) In order to provide the said canteen and bus transportation facility, the Applicant has engaged third party service providers who are providing the said canteen and bus transportation facilities to the Applicant. Since, the said services are provided by the third party service providers to the Applicant, the service providers are raising their invoices with applicable GST to the Applicant. The Applicant pays the consideration to the third-party service providers for the said canteen and transportation facilities. Thereafter, the Applicant recovers certain portion (i.e., subsidized amount is deducted from salary of the employees on monthly ....
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....widens the scope of business to include non-profit activities. Clause (b) mentions that any activity or transactions in connection with or incidental or ancillary to activities mentioned in (a) would also be included in 'business'. Clause '(c)' provides that there would not be requirement of volume, frequency, or regularity of such transactions. (2) It is an accepted fact that the Applicant is not carrying out supply of canteen services as his principal activity. No doubt his principal activity remains as manufacture & supplier of chocolates and confectionary products which is covered by clause 'a' of above definition. Let's see whether the activity of supply of canteen services, falls under the definition of business, as extracted above. Clause (b) mentions that any activity or transaction incidental or ancillary to principal activity would also be included in 'business'. The term 'incidental' has been defined in various dictionaries as under: Oxford Dictionary - the happening as part of something more important. Cambridge Dictionary - less important than the thing something is connected with or part of Dictionary.com - happening or lik....
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....is an undisputed fact that the money consideration charged, although at subsidized prices, for the supply of these services to their employees is being collected by the Applicant. (3) Therefore, it is evident on record that there are two distinct and totally different transactions in the event of supply of canteen services to the employees of the Applicant. They are: - (i) Supply of these services by the respective service provider to the Applicant (employer); and (ii) Supply of these services by the Applicant (employer) to their employees. (4) In respect of the first transaction, the respective service providers have been supplying these services to the Applicant (employer) for which the said service provider receives consideration from the Applicant on which the Applicant has been paying GST at the applicable rates to these service providers. (5) Similarly, in the second transaction, the Applicant (employer) is supplying these services to their employees for which the Applicant is receiving consideration, although at the subsidized rate, from their employees. The respective service provider invoices the appellant for the entire service....
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....II basically deals with 'services by an employee to employer', and not the other way round. Only as a corollary, the 'services by the employer to the employee', especially when provided in the form of perquisites, has been discussed in the CBIC Circular No. 172/04/2022-GST dated 06.07.2022 in its para 2 mentioned above. From the above, it could be inferred that perquisites in terms of a contractual agreement between the employer and employee are not to be subjected to GST. (2) It may be seen that in order to place any service provided by the employer to employee outside the ambit of GST, the same should be in the form of a perquisite. Though the term 'perquisite' has not been defined under the provisions of GST, the same is discussed under the Income Tax Act, where it has been stated in Section 17 (2) as follows: - "perquisite" includes- (i) the value of rent-free accommodation provided to the assessee by his employer; (ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer; (iii)----------------- .............. .............." (3) As per Inco....
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....t i.e. w.e.f. 29.03.1996 to 02.09.2001, therefore, purchases were made after payment of Tax. When the tax is paid at the first point, subsequent sales are not to be taxed in view of provisions of the section 5 of Delhi Sales Tax Act, 1975. However, till the time cars were to be sold as used cars, they were included in the notification on which tax was to be paid at last point. No protection was provided in respect of cars which were purchased under first point regime and were sold during the last point regime from levy of tax. Thus, the fact and provisions of law in that case are different than the current case. Applicant has further quoted judgement in case of M/s Raipur Mfg Co. Vs State of Gujarat (CA No.603 of 1966). However, the facts in this case and the provisions of law involved are completely different. (2) In this regard, we notice that the applicant has further placed reliance on the ruling of Gujarat AAR in RE: Emcure Pharmaceuticals Limited [2022-VIL-231-AAR], the ruling of Maharashtra AAR in RE: Tata Motors Limited in [2021-TIOL-197-AAR-GST-2020-VIL-257-AAR], the Maharashtra AAR in a ruling in RE: Posco India Pune Processing Centre Pvt Ltd (Order dated 07.09.2....
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...., it is now clarified by the CBIC circular No. 172/04/2022/GST dated 6th July 2022 that perquisite provided to the employees in view of the Contractual Agreement would not be subjected to GST. It is clarified that such perquisite are in lieu of the services provided by the employees to the employer in the course of or in relation to his employment, and should not be subjected to GST. Supplies of any services would not be subjected to GST only under the following circumstances. 1. Such services are exempt under the notification number 12/2017-CT(R) dated 28/06/2017. 2. Such a transaction in services is a non-GST supply. 3. Such services are not supply as per provisions in section 7 of CGST Act, 2017 The supply of canteen and transportation services in the nature of perquisite by the employer to the employee would not have respite from two aspects mentioned at Sr. No. 1 and 2 above as the said supply is neither exempted nor a Non-GST supply. Hence, it needs to be analysed if such services can be called as supply u/s 7. The activity of provision of canteen and transportation services to the employees are in the course of business (as detailed in par....
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....e subjected to GST by deeming it to be part of Schedule III as a corollary to entry at Sr. No. 1 of Schedule III for cohesive interpretation. The value of the outward supply of canteen and transportation service can be considered as having two parts. First part is the amount of recovery that is made from the employees, and second part is balance value of the services provided by the employer as perquisite which is in the lieu of the services provided by employees to the employer. The entire balance value of the services for which no amount is charged is the perquisite provided by the employer to the employees. As this part is in lieu of services of the employees to the employer which fall under schedule 3, the perquisite part is not taxable, as a corollary, deeming it to be falling in the said entry of schedule 3. Hence, though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax as discussed above. 5.3 Whether the Applicant would be exempted under the Sl. No. 15 of Notification No. 12/2....
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....s a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum- (a) on a time basis, whether or not with reference to any route or distance; or (b) from one point to another; and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, and includes- (i) a maxicab; and (ii) a motor-cab notwithstanding that separate fares are charged for its passengers;" As per the above definition, Regional Transport Authority imposes certain conditions on the contract carriage permit holder for carrying contract carriage. Section 74 of the Motor Vehicles Act, 1988 is produced as below. 74. Grant of contract carriage permit. - (1) Subject to the provisions of sub-section (3), a Regional Transport Authority may, on an application made to it under section 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit: Provided ....
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....onditions imposed in section 74 of the Motor Vehicles Act, 1988. In this case, the applicant is not the contract carriage permit holder and thus not bound by the conditions mentioned in the section 74 of the Motor Vehicles Act, 1988. As per the above definition of contract carriage, the passenger or passengers for hire or reward are to be engaged under a contract with them by a person with a holder of a permit of contract carriage. In this case, holder of a permit does not have any privity of contract with the passengers i.e. employees of the Applicant. Applicant has rented the buses from M/s. Om Jay Facility Pvt. Ltd. This transaction is in the nature of rent -a-cab service. M/s. Om Jay Facility Pvt. Ltd. is charging his services of providing transport buses for carrying the employees @12% (6% SGST and 6% CGST). These invoices are raised to M/s. Ferrero India Pvt. Ltd. These services are in the nature of renting of services of transport vehicles with operators. Here, the transport service provider provides buses to M/s. Ferrero India Pvt. Ltd. and charges them based on the fixed charges plus the additional Kms run by these buses. Cost of fuel is included in these charges and th....
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....es and business secrets in the expectation that the recruited employee would work for the organization for a certain minimum period. Premature leaving of the employment results in disruption of work and an undesirable situation. The provisions for forfeiture of salary or recovery of bond amount in the event of the employee leaving the employment before the minimum agreed period are incorporated in the employment contract to discourage non-serious candidates from taking up employment. The said amounts are recovered by the employer not as a consideration for tolerating the act of such premature quitting of employment but as penalties for dissuading the non-serious employees from taking up employment and to discourage and deter such a situation. Further, the employee does not get anything in return from the employer against payment of such amounts. Therefore, such amounts recovered by the employer are not taxable as consideration for the service of agreeing to tolerate an act or a situation." In view of this clarification, notice pay recoveries made from the employees are not liable to levy of tax under CGST Act, 2017. 06. In view of the extensive deliberations as held hereinabove,....