04.05.2022- Nominal charge recovered from employees for canteen-food is not subject to GST : Gujarat AAR

Nominal charge recovered from employees for canteen-food is not subject to GST : Gujarat AAR

MUMBAI: Recently, the GST-Authority for Advance Rulings (AAR) – Gujarat, in the case of Cadila Healthcare has held that canteen facilities provided by it to its employees are not a ‘supply’ as defined in the Goods and Services Tax (GST) provisions. Thus, no GST was leviable on that portion of the amount recovered from the employees.

Cadila Healthcare has approximately 7,200 employees across its factory and corporate offices. It is mandatory for it to provide canteen facilities at its factory premises, under the provisions of the Factories Act. Accordingly, it had entered into an agreement with a canteen service provider. The full amount for the food served during a particular period was paid by for the food served during a particular period was paid by the company. However, it recovered from the employee a certain predetermined percentage of this amount. Cadila Healthcare pointed out that it did not retain any profit margin when collecting this sum from its employees.

It sought a ruling on: Whether the subsidized deduction made by it from the employees who are availing food in the factory or corporate office would be considered as a supply? To this, the AAR replied in the negative.
Even earlier, the Gujarat-AAR in the case of Tata Motors had taken the same view.

Source: Times of India

http://timesofindia.indiatimes.com/articleshow/91294792.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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