GST is not leviable on employee’s portion of canteen charges paid to canteen service provider: AAR

Case Details: Authority for Advance Rulings, Gujarat Intas Pharmaceutical Ltd., In re - [2022] 140 taxmann.com 30 (AAR-GUJARAT)

Judiciary and Counsel Details

• • Atul Mehta & Arun Richard, Member
  • Sreeram Kaza, Vice President for the Applicant.
  • Asharam Meena, Asstt. Commr. & Neel Kumar, Superintendent for the Respondent.

Facts of the Case

The applicant was providing canteen facility to its employees at concessional rate. A part of charge was borne by applicant and balance amount was collected from its employees and paid to canteen service provider. It filed an application for advance ruling to determine whether GST would be applicable in the hands of applicant on amount recovered from employees.

AAR Held

The Authority for Advance Ruling observed that the applicant arranged a canteen for its employees, which would be run by a Canteen Service Provider. The applicant would not retain with itself any profit margin in this activity of collecting employees’ portion of canteen charges. Therefore, GST would not be leviable in hands of applicant on amount representing the employee’s portion of canteen charges, which shall be collected by applicant and paid to the Canteen service provider.