There is no need to pay GST on canteen charge levied from the employee

- Sales tax: Soham Mashruwala

Account officers are given unlimited powers under the GST Act. In the present situation, even if a supplier has applied for a refund of TDS deducted under GST and all the documents and ancillary evidence have been provided, the supplier is rejected and the application for refund of cash ledger is delayed due to speculation on credit ledger. . The supplier is helpless and has to treat the people as the king says. The trader is urged to pay tax in case a judgment has been challenged by the department in the Supreme Court and no stay has been granted for the execution of that judgment. Kher Andheri Nagari and Gandu Raja. Extensive provision has been made under section 4 with the assumption of paying tax on all transactions in GST. Recently, the Gujarat Advance Ruling Authority (AAR) issued a notice in May. In the application of Tata Motors Ltd., a decision has been given regarding the payment of GST on the amount of food and drink charged from the employees which is discussed in today's article.

The fact of the case

The applicant unit has its own staff and canteen facility in the factory under Factories Act 19. It is mandatory for the applicant to have this canteen facility and token amount is charged from the employees every month. The AAR was asked by the applicant for the use of the canteen whether he could incur the canteen tax and whether the amount charged from the employee was due to use the canteen facility.

Representation of the applicant

It was submitted by the petitioner that under the provisions of section 12 (2) (b), under any law, when the employer is obliged to provide canteen facility to the employee, his share of the tax is due. In addition, the government had stated in a press release on July 10, 2016 that when a facility is provided by an employer to a service employee, the transaction will not be considered as supply. The amount charged from the employee is not included in the definition of supply and such parallel decision is taken by AAR of Maharashtra by Jotun India Pvt. Lee. (2019-TIDL-312-AAR-GST). In addition, if the applicant is not entitled to the tax, is it indebted in proportion to the amount charged from the employee?

Judgment of A.A.R.

The provision of section 12 (2) (b) (1) was taken into consideration by AAR (State of Gujarat) and the provision of section 18 (2) (b) (2) was also taken into consideration. The provisions of section 12 (2) (b) (1) contain a provision on the subject of taxable receivables and the use of colon semi in the provision is a separate independent provision. Due to this, the applicant was not entitled to the canteen tax. In addition no GST has to be paid on the amount of canteen charged by the applicant from the employee. The formulation of a provision in this judgment in which the use of colon-semi-colon has been observed by the AAR that the dividend is not recoverable. The provisions of section 12 (2) (b) (2) are different from the provisions of section 19 (2) (b (1)) and cannot be obtained after division.