Case Law Details
In re Suzuki Motor Gujarat Pvt. Limited (GST AAR Gujarat)
The Authority for Advance Ruling (AAR) Gujarat recently delivered a crucial decision concerning Suzuki Motor Gujarat Pvt. Limited regarding the applicability of Goods and Services Tax (GST) on canteen facilities provided to employees and the eligibility for Input Tax Credit (ITC) on related expenses. This ruling offers significant insights for businesses on managing GST implications for employee benefits, specifically canteen services.
Detailed Analysis
Q1: GST on Recovery from Employees for Canteen Services
The AAR examined whether GST is to be discharged on amounts recovered by the applicant from its employees for providing canteen facilities. The ruling differentiated between permanent employees and other categories such as employees on deputation, employees of Maruti Suzuki India Limited (MSIL) on business travel, and temporary workers. It was concluded that the recovery from permanent employees for canteen facilities does not attract GST, aligning with paragraphs 22 and 23. Conversely, amounts recovered from employees on deputation, employees of MSIL on business travel, and temporary workers are considered ‘outward supply’ under Section 2(83) of the CGST Act, 2017, thereby attracting GST.
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