In re Bharat Oman Refineries Limited (GST AAR Madhya Pradesh)
GST is applicable on payment of notice pay recovery, medical insurance policy and telephone charges from an employees
The AAR, Madhya Pradesh in the matter of M/S. Bharat Oman Refineries Limited [Advance Ruling Order No. 02/2021 dated June 7, 2021] held that, GST is applicable on payment of notice pay by an employee to employer in lieu of notice period and telephone charges, Group Medical Insurance Policy (Policy) recovered from employees and free of cost canteen facility provided to employees. Further, Input Tax Credit (ITC) is not available with respect to canteen services provided by the employer to their employees.
Also Read AAAR Order: GST not applicable on payment of notice pay and allowed ITC on canteen services
Facts:
M/s Bharat Oman Refineries Limited (“the Applicant” or “the Employer”) is a Company carrying on the business of refining of crude oil. The Applicant has sought this Ruling w.r.t. the liability to pay tax on any goods or services or both and admissibility of ITC of tax paid or deemed to have been paid.
Issue:
Whether the Applicant is liable to pay GST on amount recovered in lieu of notice pay by an employee, the Policy at actuals from non-dependent parents of employees, telephone charges, and free of cost canteen facility to the employees at the refinery, and whether the ITC of tax paid or deemed to have been paid is admissible on such facility provided?
Held:
The AAR, Madhya Pradesh in Advance Ruling Order No. 02/2021 dated June 7, 2021 held as under:
