GST Liability on canteen food supply to empolyees
This query is : Resolved
04 December 2019
One factory running canteen as it is statutory obligation on the part of employer ( number of employees more than 25). The company is providing grocery, vegetable and milk required for running the factory. The labour contractor is engaged for canteen services. The company is recovered part of the amount from employees and contribute part of the amount.
Request expert opinion on the applicability of GST for the above as there is big confusion because of the following :
1. Section 7 of GST - Supply to related party and distinct person
2. CBIC Press release dated 10.07.2017 , no GST will attract if employer provides service as the part of contractual agreement to the employee.
3. Clarification given to section 17 (5) (b) GST ITC is allowed if the company provides food to meet statutory obligation.
4. Advance ruling confirming GST for canteen food and confirmation by adjudicating advance rule authority for the same
Request expert opinion on the applicability of GST for the above as there is big confusion because of the following :
1. Section 7 of GST - Supply to related party and distinct person
2. CBIC Press release dated 10.07.2017 , no GST will attract if employer provides service as the part of contractual agreement to the employee.
3. Clarification given to section 17 (5) (b) GST ITC is allowed if the company provides food to meet statutory obligation.
4. Advance ruling confirming GST for canteen food and confirmation by adjudicating advance rule authority for the same
CA R SEETHARAMAN
(Expert)
04 December 2019
5% GST applicable on canteen services. Calculate the value as supply to related party.
04 December 2019
Thanks for reply. whether GST is applicable for contract employees as they are not related persons
CA R SEETHARAMAN
(Expert)
05 December 2019
As a principal employer GST applicable.
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