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2023 (6) TMI 1147 - AUTHORITY FOR ADVANCE RULING, TAMILNADUValuation of supply - pure agent or not - Rate of tax on amount recovered from employees - scope of supply envisaged in the Manpower Supply Agreement - Composite supply or mixed supply - naturally bundled services or not - Output tax on food supply - Input tax on food supply - Electricity charges of hostel premises taken on rent - Diesel charges for back up gensets at hostel premises - Input tax on Rent, Security services and Housekeeping services. HELD THAT:- The Manpower Supply Agreement, inter alia, provides that “Manpower” means male or female personnel of applicant aged not less than 18 years being engaged by applicant as casual labourers, permanent employees, contract employees, consultants or engaged in any other capacity by applicant and sent by applicant to M/s Rising Stars Mobile Private Limited (RSM), the service recipient, to undertake the task for RSM. RSM would provide task schedule as deemed fit by RSM and applicant shall supply Manpower to meet 100% of the needs of RSM based upon the said task schedule and applicant shall ensure that the Manpower has completed task assigned by RSM on a timely manner - Manpower shall exclusively be engaged by applicant; under no circumstances shall the relationship of employer and employee deem to arise between RSM and Manpower. Manpower arrangements made by applicant shall strictly be under the supervision of applicant. The applicant shall make payment to ESI, PF and other relevant authorities. RSM shall pay applicant certain expenses which includes Security Deposit, Rent, Food cost, Maintenance and Security charges, etc, with effect from 01.10.2020 to 30.09.2022. If the Factory is not in operation or operating with the very lean work force, the service charges shall be reduced proportionately by RSM. If RSM is not in a position to utilize the services of applicant due to force majeure condition including epidemic diseases or due to reasons attributed to applicant, RSM shall have no obligation to pay for the services ordered but not utilized and also if the RSM is of the opinion that the possibility of the usage of the services of applicant is difficult to determine, RSM has the option to terminate this agreement at a shorter written notice of seven days. From the invoices given by vendor to applicant for food supply, it is ascertained that the applicant is engaging more than 100 workers and therefore, the provisions of Section 16 of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act) read with Rules 42 to 50 of The Tamil Nadu Contract Labour (Regulation and Abolition) Rules, 1995 stipulates that labour contractor shall provide the canteen facility to the labour employed by the contractor. Thus, there is a mandate to the applicant to provide canteen facility to the contractual worker. We find that ITC on foods, beverages, outdoor catering is not blocked, provided it is obligatory for an employer to provide the same to its employees under any law for the time being in force as per proviso to Section 17 (5) (b) after its substitution with effect from 01.12.2019 based on the recommendations of GST Council in its 28th meeting and clarified by CBIC Circular No. 172/04/2022-GST dated 06.07.2022 - Section 17 (5) allows ITC on food, beverages and outdoor catering only in case it is obligatory under any law for the time being in force. Thus, applicant is eligible for ITC on the food supplied by food vendor to contractual worker and is not blocked under Section 17(5) (b) of the Act. Similarly, the applicant is receiving, invoices with GST @ 18%, from vendors for supply of various other services, viz, Security service, Renting of Immovable Property for hostel accommodation, Building maintenance service, Housekeeping and maintenance service and consumed for supply of manpower service. As the input services are used by the applicant for supply of taxable service, the GST paid on such invoices qualify for claim of ITC subject to eligibility and conditions stipulated under Section 16 of the Act.
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