Case Law Details
In re Amneal Pharmaceuticals Pvt. Ltd. (GST AAR Gujarat)
Whether GST is applicable on the amount recovered from employee on account of third party canteen services which is obligatory under Section 46 of the Factories Act, provided by company?
In this case, a moot point is to be decided as to whether GST is applicable on the amount recovered from employee on account of third party canteen services which is obligatory under Section 46 of the Factories Act, provided by the company.
We note that the applicant is a 100% EOU. More than 500 employees are working in the factory. They are providing canteen services through third party exclusively for their employees in the factory. They offered food to their employees on subsidized rate whereby the employee’s share of the cost is being deducted from their salary. The applicant has further submitted that the canteen service provided to the employees is not being carried out as a business activity. It is according to the provisions of the Factories Act, 1948.
From the plane reading of the definition of “business”, it can be safely concluded that the supply of food by the applicant to its employees would definitely come under clause (b) of Section 2(17) as a transaction incidental or ancillary to the main business.
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