Case Law Details
In re Good Hands Facility Management Services (GST AAR Tamilnadu)
Explore the recent ruling by the Authority for Advance Rulings (AAR) in Tamil Nadu regarding the GST treatment of payments received by a facility management service provider from a manpower service recipient. This article delves into the inclusion of payments in taxable value, eligibility for input tax credit, and the applicable GST rates, providing clarity on compliance obligations.
Inclusion of Food Supply Payments: The AAR ruling states that the amount received for food supply to workers, who are employees of the facility management service provider, should be considered as part of the taxable value for the supply of manpower services. GST at the rate of 18% is applicable to such supply.
Eligibility for Input Tax Credit on Food Supply: The AAR ruling recognizes that GST paid on food supply qualifies for input tax credit under the proviso to Section 17(5)(b). This eligibility arises due to the obligation on the facility management service provider to provide canteen facilities to employees under the Contract Labour (Regulation and Abolition) Act, 1970.
Treatment of Electricity Charges: The AAR ruling clarifies that the reimbursement of electricity charges for the hostel premises, consumed by the workers who are employees of the facility management service provider, does not qualify for exclusion from the value of supply as a pure agent. Consequently, the amount received from the service recipient should be considered as part of the taxable value for the supply of manpower services, attracting GST at the rate of 18%.
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