GST CANTEEN RECOVERY

This query is : Resolved

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

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15 October 2019 The companies are maintaining canteen for employees particularly the number of employees exceeds 250. The company is recovering cost (part of the food) from employee salary and contributing cost of the food. The all the vegetables, grocery , milk and fuel have been purchased by the company in their name.

There are two point of view that recovery from employees for canteen is subject to GST as outward supply and another view that no GST is payable.

Recently one advance ruling is given in Kerala stating that GST is payable for canteen recovery.

I request expert view of whether GST is payable or not for canteen recovery of employees.

CA Anita Bhadra

CA Anita Bhadra (Expert)
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17 October 2019 AAR is applicable only to the applicant (Though, it can be considered as benchmark)

This issue is controversial from the beginning.

Press Release dt 10 July 2017 by Govt indicated that any supply made by the employer to its employee in terms of contractual agreement entered into between them, would not be subjected to GST.
However, experts are of the opinion ( based on AAR decisions ) that food supply to employee by the employer on concessional rates are subject to GST

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8489

A.S.SUNDARARAJAN

A.S.SUNDARARAJAN

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17 October 2019 Thanks for your view.

Is there any GST council/ department / finance ministry clarification or any case law relating to the above subject.

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CA Anita Bhadra

CA Anita Bhadra (Expert)
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18 October 2019 Case law on the same issue was there prior to GST.
M/S. Bhimas Hotels Pvt. ... vs The Union Of India, Rep. By Its ... on 23 March, 2017.

No clarification by GST Council/ Deptt/ Finance Ministry is available on the public domain.