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TMI Blog2018 (10) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.04.2018 filed by M/s. Caltech Polymers Pvt. Ltd. M/s. Caltech Polymers Pvt. Ltd., Malappuram (hereinafter called the appellant), a registered person with GSTIN 32AAACC9223A1ZE had preferred an application for Advance Ruling on whether recovery of food expenses from employees for the canteen service provided by the company comes under the definition of outward supplies and are taxable under Goods & Services Tax Act. 2. The applicant is a Private Limited Company engaged in the manufacture and sale of foot wear. It was submitted that they are providing canteen services exclusively for their employees. They incur the canteen running expenses for a month and recover the same from their employees without any profit margin on the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement, and is recovering only the actual expenditure incurred in connection with the food supply, without making any profit. 5. The company also referred to the erstwhile Service Tax Mega Exemption Notification No.25/2012-ST dated 20.06.2012 issued by the Government of India whereby services in relation to supply of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 was exempted under the Service Tax Law. 6. The Authority for Advance Ruling had deliberated on the issue raised and after hearing the authorized representative of the applicant elaborated as follows; "10. Schedule II to the GST Act describes the activities to be treated as supply of goods or supply of services. As per clause 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply. Since the applicant recovers the cost of food from its employees, there is consideration as defined in Section 2 (31) of the GST Act, 2017." 7. The Advance Ruling authority also clarified that "It is true that in the pre-GST period, vide sl.No.19 and 19A of Notification No. 25/2012-ST dated 20.06.2012 as amended by the Notification No. 14/2013-Service Tax dated 22.10.2013 the 'services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arify the applicability of Reverse Charge under section 9(4) of the GST Act, 2017 on the purchase of ornaments by a jeweller from a consumer. It reads as follows: "Even though the sale of gold by an individual is for a consideration, it cannot be said to be in the course of or in furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply perse. Accordingly, the sale of old jewellery by an individual to a jeweller will not attract the provisions of section 9(4) and the jeweller will not be liable to pay tax under reverse charge mechanism on such purchases". 12. Relying on the above press release, the appellant contended that if an activity is not in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee is in the course of furtherance of employment and not in the course of furtherance of business and comes under Schedule III, which is not liable to tax." 14. The contentions raised by the appellant have been examined in detail. The crucial aspects to be considered in this case are the elements of "supply" and "consideration". The appellant company has admitted that they are serving food to the employees for cash, though there is no profit involved in the transaction. In spite of the absence of any profit, the activity of supplying food and charging price for the same from the employees would surely come within the definition of "supply" as provided in Section 7(1)(a) of the GST Act, 2017. Consequently, the appellant would definitely co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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