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TMI Blog2024 (6) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... r the use of the workers. Thus, by virtue of section 46 of the Factories Act, the applicant provides meals which include breakfast, lunch, snacks and dinner to its employees. 4. The applicant provides canteen facilities to its employees in terms of the canteen policy dated 16.08.2023. In terms of the canteen policy, the applicant is deducting Rs. 260/- per month from the salary of the employees towards the meals provided in the canteen and the remaining cost is borne by the applicant. 5. In addition to above, the applicant is also providing canteen facility to Supervised Contract Employees and Third-Party Employees. In the case of Supervised Contract Employees and Third-Party Employees, the applicant recovers Rs. 260/- per month per employee from contractors/manpower supply company respectively along with GST at the rate of 5% under SAC 9963. The remaining cost of the meal is borne by the applicant. 6. The applicant has attached the Purchase Order issued to the CSP as Annexure 1, Canteen Policy as Annexure 2, a sample copy of the tax invoice issued by CSP as Annexure 3 and a sample copy of the tax invoice raised by the applicant for discharging tax on the total amount paid to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is extended to its employees as a part of its statutory obligations under the provisions of Factories Act; * that they would like to rely on the below mentioned rulings/circular which substantiate their averment that applicant is eligible to avail ITC on input service of canteen; * M/s Troikaa Pharmaceuticals Limited; * Bharat Oman Refineries Lt: * M/s EIMCO Elecon India Limited reported at 2023 (9) TMI 164; * M/S. Tata Autocomp Systems Ltd reported at 2023 (7) TMI 142; * M/S. Cadila Pharmaceuticals Ltd reported at 2023 (4) TMI 298; * M/S. AIA Engineering Limited reported at 2023 (4) TMI 297; * Tata Motors Ltd. reported at [20231 146 taxmann.com 356 (AAAR-GUJARAT) 8. The applicant has further procured services of renting/hiring of motor vehicle having a seating capacity of less than 13 persons from TSP. The applicant provides transportation facility to the following types of employees, who are on the payroll of the applicant. * Management employees (Executive, Assistant Manager, Manager. Head of Department etc.) * Staff (Plant Operator, Electrician, Boiler Attendant etc. which arc called blue collar employees). 9. The applicant is discharging applicable GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and they have more than 250 employees on payroll. Discussion and findings 13. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 14. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 15. Before adverting to the submissions made by the applicant, we would like to reproduce the relevant sections, circulars, for ease of reference: * Section 7. Scope of supply.- (1) For the purposes of this Act, the expression "supply" includes,- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssengers; or (C) imparting training on driving such motor vehicles; (aa) ... .... .... .... .... ...; (ab) ... .... .... .... .... ...; (b) [the following supply of goods or services or both- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except 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 ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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-section (5) of section 17 of the CGST Act. 5. Whether various perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are liable for GST? 1. Schedule III to the CGST Act provides that "services by employee to the employer in the course of or in relation to his employment" will not be considered as supply of goods or services and hence GST is not applicable on services rendered by employee to employer provided they are in the course of or in relation to employment. 2. Any perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are in lieu of the services provided by employee to the employer in relation to his employment. It follows therefrom that perquisites provided by the employer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and healthy eating habits are essential for employees. The purpose of this policy is to provide clarity on the administration of the canteen and its governance thereof. d) A nominal subsidized charge of 260/- Rs per month per employee is deducted from every employee's monthly pay irrespective of the facility availed or not. In view of the foregoing, we hold that the deduction made by the applicant from the employees who arc availing food in the factory would not be considered as a 'supply' under the provisions of section 7 of the CGST Act, 2017. Input fax Credit 19. The next question on which the applicant has sought ruling is whether Input Tax Credit of GST charged by the CSP would be eligible for availment by the applicant. In this connection, before proceeding further, certain factual aspects which we would like to mention, though at the cost of repetition are viz * that they employ more than 250 persons employees at their factory; * that section 17 (5) (b) ibid, was amended on 1.2.2019, and is already reproduced supra', * that the applicant is mandated vide section 46 of the Factories Act, 1948 to provide canteen facility to its employees within the factory premises; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transportation makes employee everyday commute hassle free and improve employee performance and overall company growth. Main objective is to ensure 1. Safety 2. Going Green 3. Hassel Free Employee Commute 4. Enhancing Employer branding 5. Coherence and lucidity about the facility d). Transport Facilities & Amenities * Though it is not a fastening responsibility of the company to provide transport facility, the same has been extended to employees as a gesture of goodwill. * No charges are deducted are from Management employees, it is free of cost for all employees. A subsidized amount of 75 Rs per month is deducted from the Staff as a part of their Long term Settlement (Collective bargaining). * Presently the bus/vehicle route covers (as per the current travel routes) * Each and every route is a safety assessed route and specifies a fixed time for pick-up and drop facility for all the employees. * SLT members on special request can avail transport facility up to 20 kms of radius from company with prior approval of Site Head. * This facility can be availed only on the working days of the Company. In view of the foregoing, we hold that the deduction for bus tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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