Case Law Details
M/s. Caltech Polymers Pvt. Ltd. (GST AAAR Kerala)
Food expenses recovered from employees for canteen services will attract GST, rules AAAR
The supply of food items to the employees for consideration in the canteen run by the appellant company would come under the definition of ‘supply’ and would be taxable under GST.
-Recovery of food expenses from employees for the canteen service provided by the company will attract Goods and Services Tax (GST), according to the Appellate Authority for Advance Ruling (AAAR).
-Kerala-based Caltech Polymers had approached the AAAR against a ruling given by the Authority for Advance Rulings (AAR) stating that it provides canteen services exclusively for its employees, and incurs canteen running expenses for a month and recovers the same from its employees without any profit margin.
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Author Bio
From the judgement , it implies that by charging the employees to pay the cost of the food , the employer becomes liable to pay GST thereon.
The employer can claim input credit on the input used in the canteen.
From the above judgement , it is clear that If the employer serves food free of cost, then it would not be a service by employer to employee and would not attract GST.
Please confirm