2025-VIL-203-AAR
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SGST Advance Ruling Authority

GST – Gujarat AAR – Scope of Supply, GST on subsidised meals provided by the employer to employees and contractual workers - The applicant has contracted with Canteen Service Provider (CSP) to operate the canteen within the applicant's premises. A specified percentage of the cost of the meals provided is deducted by the applicant from the salaries of its employees and from the amount paid to the contractor providing contractual workers on a monthly basis - Whether the subsidized deduction made by the applicant from the employees and workers towards the canteen facility provided by the CSP would be considered as a 'supply' by the applicant under the provisions of Section 7 of the CGST Act, 2017 – HELD - The supply of food by the applicant to its employees is in the nature of a perquisite provided by the employer to the employee in terms of the contractual agreement entered into between them, and such perquisites are not subjected to GST as per the CBIC Circular No. 172/04/2022-GST dated 06.07.2022 - The subsidized deduction made by the applicant from the employees towards the canteen facility would not be considered as a 'supply' by the applicant under the provisions of Section 7 of the CGST Act, 2017 - However, the subsidised deduction made by the applicant from the contractual workers towards the canteen facility would be considered as a 'supply' by the applicant under the provisions of Section 7 of the CGST Act. The contractual workers are not employees of the applicant, and the supply of food by the applicant to the contractual workers would be an outward supply made by the applicant in the course or furtherance of its business, which is subject to GST – The supply of food by the applicant to the contractual workers is a taxable supply, and the GST is to be paid on the amount recovered from the contractor as consideration for such supply - Ordered accordingly
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