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2023 (11) TMI 658 - AAR - GSTSupply or not - levy of GST - canteen facilities provided to its employees - tax on recoveries being made by the applicant from its employees towards the canteen and transportation facilities provided to them - Section 7 of the CGST Act - eligibility to ITC on the GST paid on canteen services in terms of proviso to Section 17(5)(b) of the CGST Act, 2017. Reliance placed on clarification provided by CBIC in Circular No. 172/04/2022 dt: 06.07.2022 and the press release no. 73/2017 dt: 10.07.2017 wherein it was clarified by the CBIC that prerequisites provided by the employer to its employees in terms of contractual agreement will not be subjected to GST. Whether GST is liable to be discharged on the recoveries being made by the applicant from its employees towards the canteen facilities provided to them? - HELD THAT:- The perquisites provided by the employer, canteen services in the present case, to their employees in terms of the contractual agreement between the employer and his employees as submitted by them, are in lieu of the services provided by them to their employees in relation to employment. Therefore the perquisites provided by the employer to the employee, in terms of contractual agreement, will not be subjected to GST. However if the employer makes taxable supply of canteen services to employees by charging consideration for the purpose of business, instead of providing them as a perquisite, the same will be subject to payment of GST, at prescribed rates, as per provisions of CGST/TGST Act’ 2017. Whether the applicant is eligible to avail input tax credit in respect of the GST paid on inward supplies used for providing canteen facilities? - HELD THAT:- As per Section 17(5)(b) of CGST/TGST Act 2017 input tax credit in respect of such canteen facilities shall be available, where it is obligatory for an employer to provide the same to its employees under Factories Act, 1948. Whether GST is liable to be discharged on the recoveries being made by the applicant from its employees towards the transportation facilities provided to them? - HELD THAT:- The transportation services, if provided as a perquisite by the employer to the employee, in terms of contractual agreement between the employer and employee, will not be subjected to GST. However if the employer makes taxable supply of transportation services to employees by charging consideration for the purpose of business, instead of providing them as a perquisite, the same will be subject to payment of GST, at prescribed rates, as per provisions of CGST/TGST Act 2017. Whether the applicant is eligible to avail input tax credit in respect of the GST paid on inward supplies used for providing transportation facilities? - HELD THAT:- Provision of service of transportation of employees from residence to office premises is for personal consumption or comfort of employees but not an activity which is part of business as the business of the applicant is to manufacture & supply of pre-engineered buildings and storage racking systems but not supply of transportation of employees or passengers. Input tax credit shall not be available in respect of goods or services or both used for personal consumption as per Section 17(5)(g) of CGST/TGST Act 2017.
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