Mumbai: In the ruler given to Tata Motors, the Gujarat bench from the Authority of the Administrative (AAR) has argued that no tax and tax tax (GST) will be collected in the nominal amount of restored from the employee for the canteen facility, which is approved by the company for catering third party.
To meet the needs of employees, corporate entities usually regulate canteen services, where food is served by third-party catering.
Some of the numbers (though, a very nominal amount) are recovered from employees and problems related to GST retribution often appear.
Tata Motors explained in its submission that it restored this nominal amount every month, by reducing salary, to ensure that the canteen is only used by its employees.
It added that a press release issued by the Indirect Tax Center & Customs Board (CBIC) has clarified that supply by employers to employees in terms of employment contract agreements (part of the cost for the company) is not subject to GST.
Because not in the business provides canteen services, the recovery of this nominal amount should not be a ‘supply’ taxable.
While factories and offices that provide important services are humming with activities, other workplaces are also preparing to open their doors to employees, even if under the hybrid model.
No doubt, the office canteen will return buzzing with activity – maybe with social distance norms.
Thus, this decision will be very helpful for corporate entities that face the same situation.
While the face verdict does not set a judicial precedent, they have persuasive value in the assessment.
This AAR verdict is consistent with the holder taken by Maharashtra Aar in another case.
On the other hand, in connection with the query on whether the input tax credit is available for companies on the GST charged by third-party catering, AAR is held that it is blocked by credit and is not acceptable.