GST on staff welfare

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..... GST on staff welfare
Query (Issue) Started By: - Kaustubh Karandikar Dated:- 11-5-2019 Last Reply Date:- 13-5-2019 Goods and Services Tax - GST
Got 4 Replies
GST
YZ (Proprietary Concern) supplying food to their employees as well as providing accommodation to them for stay, rent of which is paid by XYZ. No amount is recovered by XYZ from the employees for this facility. Is XYZ liable t .....

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..... o pay GST on it? If yes, how to arrive at the value for paying GST? Reply By KASTURI SETHI: The Reply: Dear Sir, In this connection here is a case law. 2018 (18) G.S.T.L. 508 (A.A.R. - GST) = 2018 (10) TMI 748 - AUTHORITY FOR ADVANCE RULING, ODISHA IN RE : NATIONAL ALUMINIUM COMPANY LTD. Reply By KASTURI SETHI: The Reply: In my view, no company would provide food and accommodation free of co .....

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..... st to their employees whatever may be the background.The Company may charge in some guise. The department has eagle, eye. The department knows very well how to unearth hidden facts.This activity is covered under Schedule-II Serial No.1 & 2 and both activities are taxable For valuation purpose resort to Rule 28 (a) of CGST Rule, 2017. Advise your client to leave this idea of "Free Lunch". .....

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..... It is not free at all. Nothing is free. Reply By Ganeshan Kalyani: The Reply: If no recovery is made from the employee then no GST is applicable. However, the department may raise a question on this part. Reply By Spudarjunan S: The Reply: Dear Sir, While providing such amenities to employees without any recovery, it would be diligent to include such clauses in the terms of employment contra .....

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..... ct providing all the amenities would be provided to employee in the course of his employment. This stand would effect your TDS deduction towards salary of employees by treating the amenities as Perquisites which you need to take care. Once these amenities are provided by employer to employee for the employment services provided by employee to employer then the same would get it covered under Sche .....

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..... dule III of CGST which would be "neither supply of goods nor supply of services". However, in relationt to eligibility of ITC on such expenses you need to follow the conditions and restructions provided u/s 16 & 17 of CGST Act.
Discussion Forum - Knowledge Sharing .....

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