M/s Bharat Oman Refineries Limited (GST AAAR Madhya Pradesh)
The AAAR, Madhya Pradesh in the matter of M/S. Bharat Oman Refineries Limited [Advance Ruling No. MP/AAAR/07/2021 dated November 8, 2021] reversed the ruling of AAR which held that GST is applicable on recovery of:
- Notice pay from an employee by employer in lieu of notice period
- Telephone charges
- Group Medical Insurance Policy (“the Policy”) recovered from employees and providing
- Canteen facility to employees free of cost
Held that, the AAR had erred in concluding that such activity was leviable to GST. Further held that Input Tax Credit (“ITC”) shall be available on obligatory canteen services provided by the employer to their employees.
Facts:
This appeal has been filed by M/s Bharat Oman Refineries Limited (“the Appellant” or “the Employer”) against the ruling passed by the AAR, Madhya Pradesh in M/S. Bharat Oman Refineries Limited [Advance Ruling Order No. 02/2021 dated June 7, 2021], wherein, it was held that, GST is applicable on payment of notice pay by an employee to employer in lieu of notice period and telephone charges, premium of the Policy recovered from employees and free of cost canteen facility provided to employees. Further AAR disallowed the ITC with respect to canteen services provided by the employer to their employees.
Issue:
Whether the Appellant is liable to pay GST on amount recovered in lieu of notice pay by an employee, the premium of the Policy at actuals from non-dependent parents of employees, telephone charges, and nominal charges for availing and canteen facility or free of cost canteen facility to the employees, and whether the ITC of tax paid or deemed to have been paid is admissible on such facilities provided?
Held:
The AAAR, Madhya Pradesh in Advance Ruling No. MP/AAAR/07/2021 dated November 8, 2021 held as under:
