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SUPPLY OF FOOD TO THE EMPLOYEES OF THE UNIT IN ‘SEZ’ IS NOT ZERO RATED SUPPLY

Goods and Services Tax - GST - By: - Mr. M. GOVINDARAJAN - Dated:- 1-12-2018 - Zero rated supply The expression zero rated supply is defined under section 16(1) of Integrated Goods and Services Tax Act, 2017 as any of the following supplies of goods or services or both, namely:- export of goods or services or both; or supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. Issue The issue to be considered in this article whether supplying of food .....

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under contract. The appellant is supplying snacks and breakfast, lunch, evening tea and dinner to the employees of various companies. The food is prepared on their own in the location of the appellants and distributed to the various companies under contract. There are four type of supplying foods to the employees as under- Contract with A Limited - The appellant supply the food in the premises of A limited as per the specification entered in the contract.The food is supply to the employees dire .....

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Co-operative society for supply of food and not with the company. In the fourth case the appellant entered a contract with a company which has units in SEZ.The food is supplied to the employees of the Unit and the payment is received by the appellant from the employees. The appellant filed an application before the Authority for Advance Ruling raising the following questions- Whether the activity in the first case amounts to canteen services and GST @ 5% is applicable? Whether the supply of food .....

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nt service which attracts 5% GST. The Authority for Advance Rulings gave rulings against the appellant for the first three cases. In respect of the SEZ issued the Authority gave the ruling as follows- For the first issue the Authority did not give any ruling due to lack of information furnished by the appellant. For the second issue and third issue the Authority gave ruling against the appellant. Aggrieved against the order of the Authority the present is filed by the appellants. Submission of t .....

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e not furnished by the appellants as directed by the Authority. The Authority erred in quoting, relying and concluding his opinion based to his observations on the transactions in the domestic market with zero rated supply. Section 16(3) of the Integrated Goods and Services Tax Act, 2017 allows a registered person to make zero rated supplies without payment of tax subject to conditions, safeguards and procedures as laid out under Rule 96A of the CGST Rule. Ruling of the Appellate Authority The a .....

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