In re Faiveley Transport Rail Technologies India Private Limited (GST AAR Tamilnadu)
In a recent ruling by the GST Authority for Advance Rulings in Tamil Nadu, Faiveley Transport Rail Technologies India Private Limited sought clarity on various aspects of GST liability related to services provided to its employees. The ruling addresses several key points regarding the applicability of GST and the eligibility for Input Tax Credit (ITC) on different employee-related expenses. Here’s a breakdown of the ruling:
(a) GST on Canteen Services: The ruling states that Faiveley Transport Rail Technologies India Private Limited is liable to discharge GST on the amount charged to its employees for the supply of canteen services provided on its own account.
(b) ITC on Food Provision: ITC is eligible on inward supplies received for providing food to employees, provided the establishment has more than 250 direct employees. However, the applicant must reverse proportionate credit to the extent of the cost recovered from employees.
(c) Medical Insurance Premium: GST is not liable to be discharged on the recovery of medical insurance premium from employees if it is provided as per the contractual agreement between the employer and the employee.
(d) Transportation Facility Charges: Similarly, GST is not applicable on the recovery of nominal amounts from employees for using transportation facilities, as per the contractual agreement.
(e) Car Facilities: GST is applicable on the provision of car facilities to employees, even if provided in the course of employment.
(f) Health Benefits: ITC cannot be availed on expenses incurred for employee well-being, such as vaccination and other health benefits extended to them.
(g) ITC on Gardening Activities: ITC is available on input services received for gardening activities carried out within the factory premises.
Conclusion: This ruling provides clarity on the GST liability and ITC eligibility for various services provided to employees by Faiveley Transport Rail Technologies India Private Limited. By delineating the tax treatment for different employee-related expenses, the ruling offers valuable guidance for businesses navigating the complex landscape of GST compliance in relation to employee services.
Read AAAR Order: Authorized representatives illness: AAAR Tamil Nadu Condoned delay of 27 days
Car Lease as Perquisite: GST Implications – Tvl.Faiveley Case
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
The applicant submitted a copy of Electronic Cash Ledger evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017.
2.1 The applicant, a GST Registrant, is a Private Limited company under the Administrative control of ‘CENTER’ and they arc engaged in the business of manufacturing, supplying and exporting equipment for the Rolling Stock industry. The said equipment includes, inter alia, railway door systems, grills for train coaches, braking systems and pantographs for railways.
2.2 The applicant has submitted that —
