Home Case Index All Cases GST GST + AAR GST - 2023 (7) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 142 - AAR - GSTClassification of supply - supply of service or not - deduction of nominal amount by the applicant from the salary of the employees who are availing facility of food provided in the factory premises - levy of GST on the nominal amount to be deducted from the salaries of employees - ITC on GST charged by the CSP for providing the catering services - services by the way of non air conditioner bus transportation facility provided by transport service providers - ITC on GST charged by the transport service providers for providing the non air conditioned bus transportation services - levy of GST on salary deducted in lieu of notice period from the full and final settlement of the employees leaving the company without completing or serving the complete notice period as specified in the appointment letter. Whether the deduction of nominal amount made by the applicant from the employees who are availing food in the factory premises would be considered as a ‘supply’ under the provisions of section 7 of the CGST Act, 2017? - HELD THAT:- In terms of Section 7 of the CGST Act, 2017, supply means all forms of ‘supply’ of goods/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 - the deduction made by the applicant from the employees who are availing food in the factory would not be considered as a ‘supply’ under the provisions of section 7 of the CGST Act, 2017 - the issue regarding levy of GST on the nominal amount to be deducted from the salaries of employees is rendered infructuous. Whether Input Tax Credit of GST charged by the CSP would be eligible for availment by the applicant? - HELD THAT:- Input Tax Credit will be available to the appellant in respect of food and beverages as canteen facility is obligatorily to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963 as far as provision of canteen service for employees other than contract employees is concerned. It is further held that the ITC on GST charged by the CSP will be restricted to the extent of cost borne by the appellant only - Input Tax Credit will be available to the appellant in respect of canteen facility which is obligatory under the Factories Act, 1948, read with Gujarat Factories Rules, 1963. Whether the services by way of non air conditioned bus transportation facility provided by the TSP is supply of service by the applicant to its employees under the provisions of section 7 of the CGST Act, 2017? - HELD THAT:- In terms of Circular No. 172/04/2022-GST, it is clarified that perquisites provided 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 when the same is provided in terms of the contract between the employer and employee - the deduction for bus transportation facility would not be considered as a ‘supply’ under the provisions of section 7 of the CGST Act, 2017. ITC on GST charged by the transport service providers for providing the non air conditioned bus transportation services - HELD THAT:- In terms of Section 16 of the CGST Act, 2017, ITC can be availed subject to the conditions and restrictions prescribed in the manner specified in section 49. The supply of the services in this case received by the applicant is used in the course of furtherance of their business and therefore prima facie they are eligible to take credit of GST charged by their suppliers. Section 17(5) which speaks of block credit - The amended section 17(5) wef 1.2.2019 has allowed availment of ITC on leasing, renting or hiring of motor vehicles for transportation of persons having approved seating capacity of more than 13 persons (including driver) - the applicant is eligible for ITC however subject to the condition that the buses they have hired is more than 13 seater, wef 1.2.2019. Levy of GST - Deduction of the amount equivalent to salary for the tenure of notice period not served as a compensation for the breach of the terms of the employment agreement by the employees in accordance with the appointment letter - HELD THAT:- The issue has already been clarified vide Circular no. 178/10/2022-GST dtd 3.8.2022, wherein it is stated such amounts recovered by the employer are not taxable as consideration for the service of agreeing to tolerate an act or a situation - the applicant is not liable to pay GST on the amounts deducted towards notice pay.
|