2026-VIL-75-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Taxability of recoveries made from employees towards canteen facilities and transportation services provided by employer - Applicant provides canteen and transportation services to its employees. The applicant pays the entire consideration to the respective service providers and then recovers a certain portion of the cost from the employees - Whether the GST would be payable on the recoveries made from the employees towards providing canteen facility at subsidized rates and recoveries made from the employees towards providing bus transportation facility – HELD - The supply of canteen services and transportation services by the applicant to its employees would constitute a supply of services under Section 7(1) of the CGST Act, as these activities are in connection with or incidental or ancillary to the principal activity of the applicant and hence fall within the definition of 'business' under Section 2(17) of the CGST Act - The recoveries made from the employees for these services would be liable to GST, as it is a consideration received by the applicant for the supply of these services. However, the portion of the value of these services provided to the employees as 'perquisites' in terms of the contractual agreement between the employer and employee would not be subjected to GST, as it is in lieu of the services provided by the employee to the employer in the course of employment, and hence covered under Schedule III of the CGST Act - The recoveries made from the employees are liable to levy of tax as it is consideration against canteen services and transportation services provided by the Applicant to the employees – Ordered accordingly - Whether the services of transportation of employees to and from factory by non-air-conditioned buses will be covered under “transportation of passengers by non-air-conditioned contract carriage” which is exempted as per Sl. No. 15(b) of Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 – HELD - The Applicant is providing contract carriage service to its employees. The transportation services provided by the Applicant to its employees are not covered by entry 15(b) of the Notification No. 12/2017 CT(R) dated 28.06.2027. The services provided by the applicant squarely fall under transport of passengers under SAC 9964 and taxable at 5% without ITC or 12% (18% w.e.f. 22.09.2025) with ITC (If ITC is not blocked by other provisions) under entry No. 8 (vi) of Not. No. 11/2017 CT(R) dated 28.06.2017, as amended - Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services – HELD - Section 17(5)(g) of CGST Act 2017 states that input tax credit shall not be available in respect of goods or services or both used for personal consumption - Provision of service of transportation of employees from residence to factory or office premises has been used for personal consumption or comfort of employees. The applicant is not under any statutory obligation to provide these services to his employees and the services provided comes under category of personal consumption which makes the applicant ineligible to avail ITC on transporter for transportation of employees as per Section 17(5)(g) of CGST Act 2017 - Valuation in respect of canteen and transportation services – HELD - Though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax.
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