2025-VIL-58-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Canteen Facility, Transportation Facility, Input Tax Credit, Employer-Employee Relationship - Whether the deduction of a nominal amount by the applicant from the salary of the employees who are availing the facility of food provided in the factory premises would be considered as a "Supply of Service" by the applicant under the provisions of the GST Act – HELD - The deduction of nominal amount from the employees' salary towards the canteen facility provided by the applicant would be considered as a supply of service by the applicant under Section 7 of the CGST/MGST Act, 2017. The activity of providing canteen facility is in the course or furtherance of the applicant's business, as it is incidental and ancillary to the principal business activity. Further, there is a clear reciprocity between the employees and the applicant with respect to the canteen facility, as the facility is provided as per the employment contract and the employees are paying a nominal amount as consideration - the exemption from GST on perquisites provided by the employer to the employee under the CBIC Circular No. 172/04/2022-GST dated 06.07.2022 would not apply in the instant case, as the recovery of nominal amount from the employees cannot be considered as a perquisite. Accordingly, the GST would be applicable on the nominal amount deducted from the employees' salary towards the canteen facility – Ordered accordingly - Whether the deduction of nominal amount by the applicant from the salary of the employees who will be availing the non-air-conditioned bus transportation facility proposed to be provided by the prospective Transport Service Provider will be construed as 'supply of service' by the applicant under the provisions of the GST Act – HELD - The deduction of nominal amount from the employees' salary towards the transportation facility provided by the applicant would also be considered as a supply of service by the applicant under Section 7 of the CGST/MGST Act. The transportation facility provided by the applicant to its employees cannot be considered as a perquisite, as the facility is provided for a nominal consideration and not free of cost. Accordingly, GST would be applicable on the nominal amount deducted from the employees' salary towards the transportation facility - Eligibility to avail input tax credit on the GST paid to the canteen service provider and the transport service provider – HELD - the applicant would not be eligible to avail input tax credit on the GST paid to the canteen service provider and the transport service provider, as the services provided are for the personal consumption of the employees and not for the furtherance of the applicant's business.
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