CA. Anshul Medatwal
Quick Summary
Canteen services provided by an employer to its employees fall under the scope of GST because the employer recovers the amount from its employees and such services are provided in the course or furtherance of business. Here is how such services get covered under the scope of GST. What does supply
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FAQ :
Yes, canteen services provided by an employer are generally subject to GST because the employer recovers an amount from employees, and these services are provided in the course or furtherance of business.
Canteen services are considered a 'supply' if they are provided for a consideration by a person in the course or furtherance of business. This includes situations where the employer recovers costs from employees.
Yes, if a factory employs over 250 workers and is required by the Factories Act, 1948, to provide canteen facilities, the employer should be eligible for ITC on canteen services due to a proviso in the CGST Act.
Yes, employers are eligible to claim ITC on inputs used for providing canteen services, as per Section 17(5)(h) of the CGST Act. Alternatively, they can pay GST at 5% without claiming ITC, though this rate is disputed.
The taxable value for GST purposes is the open market value of the canteen services provided.
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