M/s. Caltech Polymers Pvt. Ltd. (GST AAAR Kerala)
Food expenses recovered from employees for canteen services will attract GST, rules AAAR
The supply of food items to the employees for consideration in the canteen run by the appellant company would come under the definition of ‘supply’ and would be taxable under GST.
-Recovery of food expenses from employees for the canteen service provided by the company will attract Goods and Services Tax (GST), according to the Appellate Authority for Advance Ruling (AAAR).
-Kerala-based Caltech Polymers had approached the AAAR against a ruling given by the Authority for Advance Rulings (AAR) stating that it provides canteen services exclusively for its employees, and incurs canteen running expenses for a month and recovers the same from its employees without any profit margin.
-It also said the service provided to the employees is not being carried out as a business activity, and is according to the provisions in the Factories Act, 1948 — Section 46 stipulates that any factory employing more than 250 workers is required to provide canteen facility to its employees.
-“In view of the recent AR orders and the earlier press release, not only recovery for food expenses, but even other employee benefits may need to be evaluated to determine their taxability, by looking at the employment arrangement, contract, consideration charged etc,” he said.
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