2025-VIL-22-AAAR
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SGST AAAR

GST – Gujarat AAAR - GST on Canteen facility for Contractual Workers, Input Tax Credit on Canteen Services – Eligibility for ITC on the GST paid on the canteen services provided to the contractual workers – Appellant aggrieved by the impugned AAR ruling denying ITC on canteen services provided by the appellant to contractual workers and levy of GST on food charges recovered from contractual workers – HELD - Statutorily it is the contractor on whom the Contract Labour (Regulation & Abolition) Act, 1970 has entrusted the task of providing the amenity, however, the responsibility shifts on the principal employer ie appellant in case of the contractor is not providing the same. But the statute also states that all expenses incurred by the principal employer in providing such amenity may be recovered from the contractor either by deduction from any amount payable under any contract or as a debt payable by the contractor - The appellant in his averments assumes of a situation wherein he is thrusted with the responsibility as a primary employer, which would arise only in case the contractor fails in his statutory obligation. The assumption so made is not supported by factual evidence – Further, the clarification at serial no.5, vide CBIC Circular no. 172/4/2022-GST dated 6.7.2022 relied upon by the appellant to content that no GST amount is leviable on the amount recovered from contractual workers for canteen services, fails since the clarification states that perquisites provided by the employer to its employees in terms of contractual agreement entered into between them will not be subject to GST - the provision of canteen services to the contractual workers is not obligatory under any law, and hence, the exemption under Section 17(5)(b) of the CGST Act, 2017 does not apply - The ITC on the GST paid on the canteen services provided to the contractual workers is not admissible to the appellant – The decision of the Authority for Advance Ruling is upheld and the appeal is dismissed
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