9911796707
TMI Blog2023 (11) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of admissible input tax credit shall be made, unless the Appellant has been given an opportunity or being heard. 2. Under Section 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVI of the Act shall be binding only:- (a) on the applicant who had sought it in respect or any matter referred to in sub-section (2) of Section 97 for advance ruling: (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed; 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) or Section 101 has been obtained by the Appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made there-under shall apply to the Appellant as if such advance ruling has never been made. 1. At the outset, we would like to make it clear that the provisions of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted from the Manpower supply contractor in case of contractual employees? b. Whether Input Tax Credit (ITC), on the GST charged by the Canteen Service Provider, would be eligible for availment to the Appellant?" 4.1 The Original Authority vide Order No. HP-AAR-21/2021-7865-68 dated 22.03.2023 has ruled as follows: "Question 1: Whether the subsidized deduction made by the Applicant from the Employees who are availing food in the factory would be considered as a "supply" by the Applicant under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Himachal Pradesh Goods and Service Tax Act, 2017. Answer: Answered in the Affirmative. Question 2: Whether GST is applicable on the nominal amount deducted from the salaries of its employees? Answer: Answered in the Affirmative. Question 3: Whether GST would be applicable on the nominal amount deducted from the Manpower supply contractor in case of contractual employees? Answer: Answered in the Affirmative." Question 4: Whether Input Tax Credit (ITC) of the GST charged by the Canteen Service Provider would be eligible for availment to the Applicant? Answer: Answered in the Negative." 5. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit note to the Appellant towards the subsidized canteen charges. (vi) That the Appellant discharges GST on the canteen facility' basis the head count of the employees availing canteen facility during the month at an open market value which is determined as under -Management employees - Per plate rate charged by the Canteen Service Provider from the Appellant for the Canteen services (i.e. open market value instead of actual recovery made from the employees) Contractual employees - GST is paid on the actual recovery from Manpower Supplier towards meals and snacks deemed as open market value. (vii) That the Appellant is liable to pay to the Canteen Service Provider, for establishing the canteen set-up. who raises GST invoice with tax rate of 5%. The Appellant does not avail ITC of the GST component paid there-under. (viii) That Section 46 of the Factories Act, 1948 provides that any specified factory wherein more than 250 workers are ordinarily employed, a canteen or canteens, shall be provided and maintained by the 'Occupier' for the use of the workers. "In this regard, the Appellant shall also refer to Section 2(n) of the Factories Act, 1948 which defines the term 'occup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant, considering that it is practically inconvenient to enter in contractual agreement with every employee, the Canteen Service Provider has requested the Appellant and has entered into a contractual arrangement with the Appellant It is agreed that the Appellant shall contract and pay in full for the food served during a prescribed period on behalf of the employees and a portion of the amount paid by the Appellant is recovered from the employees and the balance amount which is borne by the Appellant, is treated as employee benefit / welfare expenses. (xv) That for the sake of reiteration, the Appellant would like to submit that such canteen facility is set up by the Appellant out of the mandate laid down by the Factories Act, 1948. (xvi) That the Appellant had relied on the following rulings by various AARs at the Advance Ruling Authority stage, where it has been commonly held that GST is not leviable on the amount representing employees' portion of the canteen charges, which is collected by the Appellant and paid the canteen service provider: Gujarat AAAR in the case of Amneal Pharmaceuticals Pvt. Ltd Karnataka Authority of Advance Ruling in the case of Dakshina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidized shared transport facility' to the employees in terms of the employment contract through third party vendors would not be construed as "Supply of Service" by the company to its employees; (xix) That the Appellant places reliance on the decision of the Haryana Authority for Advance Ruling- in the case of RITES Limited (2022-VIL-283-AAR), where the applicant company charged a nominal amount from its employees for the canteen facility. The authority ruled that "The payment of the meals is being made by the applicant in bill to the canteen vendor. In this matter, the authority is of view that the transaction/deduction of nominal amount from the salary of the employees at fixed rate is outside the preview of the taxability under the GST Act." (xx) That the Appellant places reliance on the decision of the Maharashtra Authority for Advance Ruling in the case of Syngenta India Limited (MANU/AR/0008/2022) wherein the authorities held that GST would not be payable on the recoveries made from employees towards providing parental insurance as the same does not amount to supply of service under the GST Laws. (xxi) That the Appellant places reliance on the decision of the Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the Act, the term 'Supply' includes all forms of supply (goods and/or services) and covers agreeing to supply when the supply is for a consideration and is in the course or furtherance of business. The word 'supply' is all-encompassing, subject to exceptions carved out in the relevant provisions. 'The Appellant submits that 'supply' as defined under Section 7 (stated supra) also provides that it has to be 'made or agreed to be made' for a consideration, thus indicating the requirement of an activity to be done on the part of the supplier in order to trigger the event of supply; (xxv) That as per definition of "consideration" in terms of Section 2(31) of CGST Act, 2017 and Para 2.3. of the Education Guide, (which lists down the salient features of 'activities for a consideration', 'activities without a consideration' and 'payments without activity'), it emerges that an amount cannot be termed as 'consideration' in the absence of a reciprocity between the party who makes the payment and the recipient of the said amount; (xxvi) That the Appellant has demarcated specific space and established other infrastructure for the canteen as mandated under Factories Act and facilitating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion whether food-stuffs and other items served in canteen of a factory sold on non-profit basis at approved prices would constitute sale and it was laid down that as dominant object of running canteen was rendering services to its employees as a welfare measure, the said activity would not constitute sale (xxxi) That the Appellant places reliance on the decision in the case of Woodlands Hotel (P) Ltd. v. The State of Karnataka (1995) 97 S.T.C. 251 wherein a question had arisen before the Division Bench of the Karnataka High Court as to whether the activity of the employee in supplying food to its workmen and deducting the same from their wages would constitute sale and it was laid down that such an activity would not come within the ambit of sale, and, therefore, the employer was not liable to payment of sales tax under the Karnataka Sales Tax Act. (xxxii) That the Appellant places reliance on the decision in the case of Bihar Alloy Steels Ltd., and Ors. Vs State of Bihar and Ors, wherein the High Court of Patna Bench (Ranchi Bench) (MANU/BH/0150/1996) held that "dominant object of supplying the electricity to the employees was for rendering services as welfare measure and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reiterated here below' which the learned authority have failed to consider and appreciate:- a. Cinemax India Limited Vs Union of India (Special Civil Appeal Nos, 8032, 9661, 11032, 11111, 12933, of 2010 and 707 of 2011 decided on 23.08.2011) wherein, 'furtherance of business' has been pointed out that, it means an act of furthering business, helping forward business, promotion of business, advancement of business or progress of business" b. Indian Institute of Technology Vs. State of Uttar Pradesh & Ors. [1976 (38) STC 428 (All.)] it was held that - (a) the statutory obligation of maintenance of a hostel which involved supply and sale of food was an integral part of the objects of the Institute; and (b) the running of the said hostel could not be treated as the principal activity of the Institute. Consequently, the Institute was held to not be doing business. c. M/s Jotun India Pvt Ltd [2019 (10) TMI 482] by the Authority for Advance Ruling, Maharashtra, wherein it was held that the recovery of 50% of Parental Health Insurance Premium from, employees does not amount to "supply of service" under Section 7 of the CGST Act, as the Assessee was not in the business of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is without application of mind and unreasonable. It is a settled principle in law that the substance survives over the form. In the present case, even though the Appellant does not have an employment contract for provision of canteen facility as such, it is implied that the canteen area is set up for the benefit of the Appellant's employees only and not for any outsiders. As already stated, the Appellant wish to reiterate that the canteen facility is being provided by the Appellant to its employees due to the mandate specified in the Factories Act. Therefore, irrespective of whether the Appellant has separately entered into an employment i contract for provision of canteen facility, the same is impliedly said to be a part of the existing employment contracts, Moreso when the deduction of canteen charges is being made from the employees payslip. (xliii) That the absence of separate contract for supply considered along with the facts that only employees are allowed to consume foods in the canteen and the collection of nominal amounts is effected through pay slip prove the absence of intention to supply food and separates the activity from the business; that it is only the canteen c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 06, 2022, it draws reference of GST council's 28th meeting and press noted dated July 21, 2018, it has clarified that "that scope of input tax credit is being widened, and it would now be made available in respect of Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force". Accordingly, it is clarified that the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the whole of clause (b) of sub-section (5) of section 17 of the CGST Act. (xlvii) That further the Appellant places reliance on the ruling passed by the Appellate Authority for Advance Ruling in the case of Bajaj Finance Limited' (MANU/AI/0118/2019), it is conceded that the ruling made in the impugned AAAR order is contrary to the interpretation of the legal provision as envisaged by the Board, and since the Board circular is beneficial in nature, the same needed to be applied retrospectively in keeping with the Hon'ble Apex. Court Judgement relied upon by the Appellant; that therefore, the finding of the learned advance ruling authority in the impugned order that Input Tax Credit (ITC) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in concluding that Input tax credit (ITC) is not admissible. (li) The learned authority did not consider Section 17(5)(b)(l) of CGST Act- 2017; that thus, without prejudice to our other arguments .and contentions in this appeal, it is submitted that if the activity of recovery of nominal amount from employees towards canteen food is held to be supply taxable under GST, then consequentially the Input tax credit (ITC) with respect to the GST levied on the expenses incurred for the canteen facility including the GST charged by the canteen contractor in their invoice may please be allowed. This follow's the natural corollary and legal stance as allowed by Sec 17(5)(b) of CGST Act as mentioned above and intention of introduction of GST by way of taxing only the value addition at each stage of supply. 6. RECORDS OF HEARING: - 6.1 The case was taken up for hearing on 31.08.2023 at 1500 hrs through video conferencing. Sh. Vishal Aggarwal, CA, appeared on behalf of the applicant and reiterated the contention as made in the written submission. 6.2 During the personal hearing proceedings, Sh. Rajesh Puri, Chief Commissioner, CGST, Chandigarh Zone, Member, AAAR, raised two queries, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or not such Canteen facilities are part of employment contract. He said that this is their legal obligation, as Factory Act made it mandatory to provide it to workers who are their workers & employees. 6.5 The Counsel further stated that since in bis opinion, it is statutorily mandated, it is immaterial whether it has been mentioned in employment contract or not The Counsel further stated that recoveries from employees are made through Pay-slips and employees are aware that they are getting food at subsidized rates. This according to Learned Counsel constituted an implied contract. Further, he stated that being a statutory mandate, employee has a right to receive such benefit from employer. 6.6 Dr. Yunus, Commissioner, State Taxes and Excise, Himachal Pradesh, member, AAAR, raised a query as to wherefrom would the Ld. Counsel draw the inference that the services provided by way of canteen facility by the Appellant party, are not supplies under the provisions of the GST Act, as Learned Counsel has harped on the issue that provisioning of Canteen Services is mandated under law and so it cannot be considered as supply? 6.7 To this, the Counsel stated that for something to become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relevant extract from the minutes of 47th GST Council Meeting: "7.23 Clarification on various issues of Section 17(5) of the CGST Act 7.23.1............ 7.23.2............ 7.23.3 Another issue was whether various perquisites provided by employer to its employees as per contractual agreement, were liable for GST. The Law Committee clarified that any perquisites provided by employer to its employees in accordance with the terms of contract were in lieu of services provided by the employee and as per Schedule III of the ('GST Act, the same would not be subjected to GST. (d) that the food facility provided by the Appellant to its employees would not amount to 'supply' under GST and accordingly GST is not payable on the amount recovered/representing the employees portion of canteen charges which is collected by the Appellant and paid to the canteen service provider. (e) It is abundantly clear that any services provided by the employer to the employees in terms of the contractual agreement entered into between the employer and employee will not be subjected to GST. As explained in the Appeal memorandum, the Appellant in the present case is providing canteen facility to its em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot hold a license to carry out food related business. Had the Appellant been engaged in the business of canteen services, the Appellant would have been required to obtain the requisite registration and undertake necessary compliance under the FSSAI regulations. The relevant . provisions under FSSAI Act are extracted below:- "Section 3(1)(n) "Food business" means any undertaking, whether for profit or not and whether public or private, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, import and includes food services, catering services, sale of food or food ingredients; Section 3(1)(o) "food business operator" in relation to food business means a person by whom the business is carried on or owned and is responsible for ensuring the compliance of this Act, rules and regulations made thereunder;" (l) From the above, it is evident that the term "food business" means any undertaking involved in the activities related to manufacture, processing, packaging, storage, transportation and in distribution of food. It also provides that a food business operator is a person who carries or owns a fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority in para 20 of the impugned order has held that the Appellant is not eligible to ITC of the GST paid on manpower supply services that are used for providing canteen facility, as the services of providing canteen facility by the Appellant fall under SI. No. 7 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 ("rate notification") which attracts GST (a} 5% without ITC. In this regard, the Appellant submits that section 17(5) of the CGST Act, 2017 (supra) which is a non-obstante clause, does not impose any restriction on ITC to the Appellant in this case, it is only the rate notification that contains such a restriction. The Appellant submits that the provisions of Section 17(5) of the CGST Act, 2017 will have an overriding effect over Section 16 of the CGST Act, 2017 and the rate notification; (s) Further, the Appellant would also like to submit that, input tax credit availability should not be restricted only to the extent of GST charged by the service provider in respect of canteen facility provided to its direct employees alone since, the proviso to section 17(5)(b) of the CGST Act, 2017 provides that, input tax credit in respect of such goods or servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the proviso at the end of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? ii. .................. 2.3.2 ............ 2.4 Law Committee in its meeting dated 11.04.2022 deliberated on the issue and recommended that the issue may be clarified through a circular that i. proviso after sub-clause (iii) of section 17 (5) (b) of CGST Act is applicable for all sub-clauses (i), (ii) & (iii) of section 17(5) (b); ii.................................... iii...................................." Relevant extract from the minutes of 47th GST Council Meeting: "7.23 Clarification on various issues of Section 17(5) of the CGST Act 7.23.1 The second issue pertained to interpretations of Section 17(5). In this regard, one of the issues was whether proviso at the end of Section 17(5)(b) of the CGST Act is applicable to entire clause (b) or only to sub-clause (iii) of clause (b). The Law Committee clarified that the proviso after sub clause (iii) of Section 17(5)(b) is applicable to all the sub clauses under clause (b) of Section 17(5). 7.23.2 ........... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent employees', where as he is calling contract workers as 'contract employees'. For the sake of clarity and gravity, we would use the expression 'employees' for the management employees, as engaged .by the Appellant and 'contract workers' for the persons supplied by the contractor. The Appellant states that they are providing canteen facility through the contractor namely M/s Keerat Hospitality & Catering Service, Parwanoo, Distt. Solan (HP) and paying on monthly basis to such contractor based on actual eatables. In this background the Appellant has filed the appeal against the order passed by the Advance Ruling Authority. 8. At the outset, it is observed that the Appellant is asking questions which are quite ambiguous. Vide question (1) (para 4 above refers) they are asking whether deduction of amount by the Appellant from the salary of employees is supply or not and consequently such deductions is leviable to GST or not? The similar question is asked with respect to the recover}' made from the manpower supplier in the case of contractual workers. We observe that the collection of money is never supply and, therefore, can never be leviable to GST. This is clearly borne out of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ominal amount from their employees (including contractual workers) for food provided which cannot considered as 'Consideration'. The Appellant has relied upon the Education Guide of Service Tax and some judgements to say that consideration is present only if there is an element of reciprocity between the service provider and the person making the payment. The Appellant has accepted that they are charging some amount from their employees as well as contractual workers. Vide Appellant email dated 08.09.2023, it is informed that canteen service provider has charged about Rs. 45.43 lakhs towards supply of food, Rs. 1.14 lakhs towards CGST and Rs. 1.14 lakhs towards SGST during the period January. 2023 to July. 2023. In other words the total money paid to the canteen service provider for the period January, 2023 to June, 2023 totals to about Rs. 47.70 lakhs. Against this payment it is claimed that the Appellant has recovered Rs. 1.58 lakhs from the employees and Rs. 0.95 lakh from manpower supplier, who is supplying them contract workers. Therefore, consideration is present in the transaction. 9.1 Coming to legal position, it is seen that the consideration is defined in Section 2(31) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in factory, for canteen, does not constitute sale, as dominant object of running such canteen is rendering services to its employee as welfare measure; that the Hon'ble Courts have held that supply of food to employees in a canteen, is not liable to sales tax. We find that even these contentions of Appellant and the case laws cited by them, hold that the 'supply of food to factory' workers is rendering of service and but since GST is chargeable both on supply of goods and services and therefore, this is immaterial whether such supply of foods is considered as sale or service as GST is leviable on both types of transactions of goods whether sale or service, The case laws cited by the Appellant hold that the supply of food to its employees is service, therefore even accepting his contention; GST is leviable for supply of food. 9.5 Further, we find that the Appellant has also contended that supply of subsidised food should be seen a part of pay package negotiated with the workers. We would discuss this plea in later paras. 10. We also observe that the Appellant has argued that he is in the business of manufacture and supply of automotive components and supply of food is not his bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing by his own pleading, supply of food is in connection with and ancillary to his main activity of manufacture and supply of automotive components. 10.5 Further, in terms of Section 2(17) (c), as mentioned in para 10 above, the volume of transaction is immaterial for the purpose of coverage under "Business", therefore, even if supply of food is quite insignificant activity in terms of volume of transaction, still in terms of clause (c) of the aforesaid section ibid, the activity of supply of food, is a supply within the meaning of supply under Section 7 of the CGST Act. 2017. In other words, clause (b) and (c) of definition of business covers the activity of supply of foods, within the definition of "business" 10.6 The Appellants has also cited the few rulings passed by the Advance Ruling Authority in respect of some other parties holding that GST is not leviable on the amount collected from the employees towards canteen charges. Though, there is no denying that these rulings have some persuasive value, however, these rulings are not binding on this Authority and this Authority differs from the rulings pronouncement by the AAR/AAAR in similar cases favouring the Appellant. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts circular ibid, has mandated that perks provided in terms of contractual agreement, are not supply under GST. In other words, the circular ibid has mandated that if any perk is provided to the employee, in terms of contractual agreement, then such perks are outside the purview of GST. 11.2 The AAR in its ruling has held that there is not contractual agreement between the Appellant and the employees/ contract workers for -providing subsidised food and, therefore, benefit of the circular cannot be extended to the Appellant. The Appellant during the course of hearing has adopted the argument that since it is statutory mandated in the Factories Act that canteen facilities is to be established in the factory, therefore it is immaterial whether such clause is mentioned in the contractual contract or not. He further stated that there is an implied contract between the Appellant and the employees, and the employees are aware that they would be getting the food at subsidised rate. Since under the law, employees have right to receive benefit, therefore absence of this clause in the employment agreement cannot be the basis for denial of benefit of above circular in his case. 11.3 We are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers are ordinarily employed, there provisions for canteen is a must, however, it does not provide for any provision for exemption from levy of any taxes. In fact tax in the case of supply of food-leverages is leviable in terms of the provisions of the GST Iaw; and is not covered by any exemption, at all. Even logically speaking, provisions of the Factories Act, cannot provide any mandate on the issue of leviability or otherwise, of GST, a question which needs to be determined within four comers of the GST Law. Further, the said consideration for supply of food/beverages, although at the subsidised rate, also does not qualify as the perquisite to extend the benefit of non-Ievy of GST in terms of the above cited Circular dated: 06.07.2022, as already discussed above. 11.6 Further, we find that Rule 68 of the Himachal Pradesh Factories Rules, 1950, also envisages as under:- "68. Prices to be charged- (1) Food, drink and other items served in the canteen shall be sold on a non-profit basis and the prices charged shall be subject to the approval of the Canteen Managing Committee.' (2) The charge per portion of food stuff, beverages and any other item served in the canteen shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept when used for the purposes specified therein, life insurance and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply; (ii) membership of a club, health and fitness centre: and (iii) travel benefits extended to employees on vacation such as leave or home travel concession Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force." (emphasis supplied) 12.2 The reading of the above provision makes it clear that provisions of blocked credit under Section 17(5)(b), inter-alia on food and beverages, do not apply only where, it is obligatory for an employer to provide goods and services or both to the employee under any law for the time being in force. Since, the proviso carves out an exception to the Rules/ Provisions, a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstitution, the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act provides as under: "Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force." 2. The said amendment in sub-section (5) of section 17 of the CGST Act was made based on the recommendations of GST Council in its 28th meeting. The intent of the said amendment in subsection (5) of section 17, as recommended by the GST Council in its 28th meeting, was made known to the trade and industry through the Press Note on Recommendations made during the 28th meeting of the GST Council, dated 21-7-2018. It had been clarified "that scope of input tax credit is being widened, and it would now be made available in respect of Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force." 3. Accordingly, it is clarified that the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the whole of clause (b) of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1948 as extracted in Para 11.4, the Appellant has the legal responsibilities to provide & maintain the canteen. The Appellant has accordingly, instead of maintaining the canteen himself, has engaged another person (hereinafter called as Canteen Contractor), who is providing canteen services to the workers of the Appellant on behalf of the said Appellant. The service so provided is righty classifiable as "Restaurant Service" as already clarified under Circular No. 164/20/2021/GST dated 06.10.2021 where-under, vide Point No. 3 & 4. it has been clarified that cooking & supply of food will only be covered under Restaurant Service and in case there is no cooking but only supply of food then GST rate as applicable on supply of Goods would be attracted. In other words, if the cooking of food & supply of the same food is made as a single transaction, then the said transaction is the Restaurant Service. Ilie Restaurant Service attracts 5% of GST in terms of entry no. 7 (ii) of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 which was amended by the Notification No. 20/2019-C.T. (Rate) dated 30.09.2019, effective from 01.10.2019. 12.10 From the facts of the case, it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een Contractor but decided to run the 'canteen himself, as mandated in the Factories Act, 1948, then also he had to compulsorily pay 5% of GST without availment of any ITC in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 supra. 'Therefore, just by engaging, a Canteen Contractor, he can't be allowed to adopt an interpretation for availing ITC which is not available to him in a case of direct supply of Service. 13. In view of the foregoing facts, circumstances and provisions of the GST law, we hold that there is no case to differ from the decision of the Authority-for Advance Ruling of Himachal Pradesh, issued, vide HP-AAR-21/2021-7865-68 dated 22.03.2023, albeit for different reasons. 14. Accordingly, we pass the following order: RULING Question 1: Whether the subsidized-deduction made by the Appellant from the Employees who are availing food in the factory would be considered as a "supply" by the Appellant under the provisions of Section 7 of Central Goods and Service Tax Act, 2017 and Himachal Pradesh Goods and Service Tax Act, 2017? And; Question 2: Whether GST is applicable on the nominal amount deducted from the salaries of its employees? And; Ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
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