TMI Blog2019 (6) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the employees for wearing to work each day. Though they are personalized uniforms provided they are not available for employees personal use. The uniforms that are put on by the employees when they arrive at work and were taken off at the end of work. The said uniforms, it appears laundered and maintained by the assessee. It is clear that the said clothing (uniforms) are not available for general or personal wear of the employees and when the clothing is not actually used for general or personal wear, in our opinion, are not taxable under fringe benefits. There was no welfare appended to the employees of the assessee by providing uniforms. CBDT passed Circular No.8/2005 wherein it clarified to a frequently asked question. At question no.74, it was asked whether MBT is payable on expenditure incurred on providing shoes or uniform or equipments to the employees or for the purposes of reimbursement of washing charges. It was clarified to the question above that any expenditure incurred for meeting the employers statutory obligation under the Employment Standing Orders Act 1946 fall within the scope of the exclusion in the Explanation to Clause E of sub-Section 2 of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.12.2009 passed u/s 115WB(E)(3) of the Act. 4. Aggrieved by order of Assessing Officer, the assessee preferred an appeal before the CIT(A). We find that the assessee submitted that the assessee provides uniform to the staff to perform a special kind of duty while providing services in the hotel premises. Each day the uniform is provided at the beginning of the shift and taken back at the end of the duty hours. This is the custom prevailing in the hotel industry. In the provision of uniform there is no element welfare involved as no benefit flows to the employees by wearing such uniform and it is worn in the hotel only. Further it was submitted vide letter dated 30.11.2009 that in reply to query no, 74 of CBDT Circular No.8/2005 dated 29.08.2005, it was clarified that any expenditure to meet employer's statutory obligations under Employment Standing Orders Act would not come under the purview of FBT. The unique nature of the hotel industry the employer is under obligation to incur expenses on staff uniform. In terms of section 7 of the Industrial Employment standing Orders Act it was claimed that FBT was not payable on staff uniform of ₹ 38,94,917/-. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. 5. The employee is indifferent to the provision of uniform in the sense that if the employer insists on it and provides it then only he has to wear it. lf the employee is indifferent to something it cannot be said to have any element of employee welfare. 6. ln CBDT Circular No. 8/2005 dated 29.08.2005 in reply to query no. 74, it was clarified that any expenditure incurred to meet employers' statutory obligations under the Employment Standing Orders Act, 1948 would not come under purview of FBT. Because of the unique nature of the hotel industry and the prevailing custom the employer is under obligation to incur expenses on staff uniform. Following the essence of the said circular, uniform allowance should not be considered as staff welfare and consequently should not be subject to FBT. 6. The CIT(A) having considered the submissions of the assessee held that the uniform and washing allowances etc. provided are covered under fringe benefit tax and placed reliance in the case of ONGC Workshop of Hon ble High Court of Gujarat. Further referred to CBDT Circular No.8 of 2005 dated 29.08.2005 as for which any expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1947. The ld. AR further referred to Page No.6 of Paper Book and submitted that every employee at the start of his duty/shift must be present in uniform which is prescribed by the assessee at his appointed place of duty and would not leave at the end of his duty/shift unless he hands over the charge of work properly to his relieving employee. He submits that the assessee supplies uniforms to the employees in accordance with the point no.6 and at the end of the respective duty, the said employee has to leave the said uniform with the assessee. The said employee does not carry the said uniform with him and it rests with the assessee. The said uniform does not grant any welfare to the employee and argued that the supply of uniform and expenditure incurred thereon does not fall under the fringe benefit tax. The assessee referred to an order of this Tribunal in the case of Mercury Car Rentals Private Limited in ITA No.1373/Kol/2016 for Assessment Year 2007-08 order dated 08.12.2017 placed at Page No.22 of Paper Book. He argued that the uniform supplied to the employees is the policy of the assessee and supply of uniforms are necessary for the purpose of carrying on its business. He arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed above, we find no welfare is attributed to the employees by providing uniforms by the assessee directly or indirectly. We find it is neither a privileges or services or facilities or amenity provided to the employees by the assessee. Further in the present case, the said uniforms are required or essential to be worn as a condition of employment in terms of Point No.6 vide standing orders which are framed in accordance with section 7 of Industrial Employment (Standing orders) Act 1946. Further the standing orders is applicable to permanent employees and probationers covered under the Industrial Disputes Act 1947. So therefore as rightly pointed out by the ld. AR, there was no welfare appended to the employees of the assessee by providing uniforms. 12. Further we note that the CBDT passed Circular No.8/2005 wherein it clarified to a frequently asked question. At question no.74, it was asked whether MBT is payable on expenditure incurred on providing shoes or uniform or equipments to the employees or for the purposes of reimbursement of washing charges. It was clarified to the question above that any expenditure incurred for meeting the employers s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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