TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1324
X X X X Extracts X X X X
X X X X Extracts X X X X
....y. The applicant further stated that accommodation facility in the dormitory is provided only to the employees and student trainees and not to their family members. Further, if the employees choose not to use the accommodation facility, then in such cases, they have an option to opt out of the facility by submitting an exit form. 4. The applicant stated that in order to provide the accommodation facility in dormitory to its employees and student trainees, the applicant has entered into an agreement with third-party accommodation service provider [for short - 'ASP']. The accommodation service provider issues monthly invoice for providing the accommodation facility in the dormitory and recovers GST at the rate of 18% from the applicant. 5. The applicant believes that the accommodation facilities so provided to its employees do not qualify as 'supply' in terms of section 7 of the CGST Act and is therefore not leviable to GST. Thus, no GST is liable to be discharged on the recoveries made by the applicant towards such accommodation facilities from the employees. However, in case where the said accommodation facility is provided to the student trainees, the same would qualify as 'supp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d from the employees is not 'consideration' since it is not premised on the enforcement of any reciprocal obligation, and cannot be linked to a 'supply' for the purpose of levy of GST; * that the applicant deducts a pre-determined amount from the employee's salary as recovery of expenses; that there is no reciprocity of any activity or transaction i.e., there is no quid pro quo (there is no implied or express reciprocity) and direct and immediate link or nexus between the accommodation services provided by the accommodation service providers to the applicant and the nominal amounts recovered by the applicant from the employees in terms of the company policy; * that in the absence of an identifiable supply, the activity of recovering nominal amounts from the employee's salary towards the provision of accommodation would not constitute 'consideration' for a supply; * that the applicant further relies on the * ruling of GAAR in the case of M/s Cadmach Machinery Pvt Ltd. 2022 (4) TMI 1337; * ruling of GAAR in the case of M/s Dishman Carbogen Amcis Limited 2021 (8) TMI 836; * that any facility provided by the employer to its employees in terms of the employer-employee relat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T. 8. On the third issue regarding admissibility of ITC in respect of accommodation facility provided to employees, the applicant has made the following submission viz * that as per sub section (1) of section 16 read with sub section (60) and (17) of section 2, the applicant is eligible to claim ITC of the GST paid on procurement of accommodation services, since such input services are used or intended to be used in the course or furtherance of the business; * that the ITC of the GST paid on procurement of accommodation services is not restricted in terms of section 17(5) of the CGST Act; * that they would like to rely on the below mentioned ruling wherein GAAR held that the applicant is eligible to avail ITC of the GST paid on the transportation facility and canteen facility provided to its employees; * M/s Zentiva Private Limited 2024 (6) TMI 224; * M/s Tata Autocomp Systems Ltd 2023 (7) TMI 142; * M/s EIMCO Elecon India Limited 2023 (9) TMI 164; * M/s Dormer Tools India P Ltd. 2024 (6) TMI 222 * M/s Kohler India Corporation Pvt Ltd. 2024 (1) TMI 703; * M/s Cadila Pharmaceuticals Ltd. 2023 (4) TMI 298; * M/s AIA Engineering Ltd. 2023 (4) TMI 297; * M/s Tata....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dani, AGM (Taxation) of the applicant appeared and reiterated the facts as stated in the application. 13. Assistant Commissioner of State Tax, Unit 11, Ahmedabad, vide his letter dated 24.4.2025, made the following submissions, viz * that GST is generally not liable to be discharged on nominal amounts recovered from employees for accommodation; * that GST is liable to be discharged on nominal amounts recovered from student trainees for accommodation; * that ITC is not available on accommodation for employees as it is hit by section 17(5)(b)(i); that it is akin to personal consumption; that it is available only if the provision of such accommodation is obligatory, as far as employees are concerned; * that ITC is not available in respect of student trainees, as it is hit by section 17(5), ibid. Discussion and findings 14. 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. 15. We have considered the submission....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as - (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. * Circular No. 172/04/2022-GST S.No Issue Clarification 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 between....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which the applicant has sought ruling is whether ITC of GST charged by the ASP for the accommodation facility provided to its employees and student trainees can be availed by the applicant. 22. The relevant extracts of section 17(5), ibid, which deals with blocked credit, is reproduced below, for ease of reference, viz Section 17. Apportionment of credit and blocked credits.- (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] ... ..... [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, 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....