Suzuki Motor Gujarat Pvt Ltd (GST AAR Gujarat)
Gujarat AAR clarified that nominal amounts recovered from permanent employees for dormitory accommodation are not treated as ‘supply’ under GST, while charges recovered from student trainees are taxable. ITC is allowed for both categories, subject to cost borne. The AAR ruled that employee recoveries are exempt from GST, student trainees’ recoveries are taxable, and ITC can be claimed on GST paid to the accommodation service provider. GST ruling confirms that dormitory accommodations provided to permanent employees are considered perquisites and exempt from GST, while similar facilities to student trainees are taxable. ITC is available for the GST paid on both, proportionate to the cost borne.
The Gujarat Authority for Advance Ruling (AAR) has ruled on a case involving Suzuki Motor Gujarat Pvt. Ltd. regarding the GST implications of providing dormitory accommodation to its employees and student trainees. The AAR found that the nominal amount recovered from permanent employees for accommodation is not subject to GST, as it is considered a perquisite under the employment contract and is therefore outside the scope of “supply” as defined by Section 7 of the CGST Act. The ruling cites Circular No. 172/04/2022-GST to support this position. Conversely, the AAR held that the amount recovered from student trainees is liable for GST, as they are not on the company’s payroll and the accommodation is considered a taxable supply of service provided in the furtherance of business.
