In re Eastern Condiments Pvt. Ltd. (GST AAR Kerala)
Summary : The applicant is a registered entity engaged in the manufacture and supply of spice products and related goods. As part of its employee welfare and operational requirements, the applicant provides residential accommodation to its employees by renting residential dwellings from various unregistered landlords. The total monthly rent amounts to approximately ₹26,00,000, and the applicant estimates GST liability of about ₹1,00,000 per month under the Reverse Charge Mechanism (RCM). The applicant sought an advance ruling on whether GST is payable on such rent and whether Input Tax Credit (ITC) would be available if GST is paid.
The applicant argued that the accommodation provided to employees forms part of the employment contract and should be treated similarly to canteen and transportation facilities. They relied on provisions of the CGST Act, Schedule III, a government press release, and certain advance rulings to contend that services provided by employers to employees in the course of employment are not treated as supply. They submitted that residential accommodation should also be considered a perquisite and therefore outside the scope of GST. They further sought clarity on eligibility of ITC for GST paid under RCM on such rented dwellings.
