GST on Canteen Recovery

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This discussion explores whether a manufacturing company can charge GST on amounts recovered from employees for canteen food, especially when the company claims Input Tax Credit (ITC) on the original canteen bills. Experts debate the taxability based on whether the canteen facility is subsidised, part of the employment agreement, or if the full cost is recovered. The implications of the Factories Act and relevant rulings are also considered.

RAMAKRISHNA K

RAMAKRISHNA K (Querist)
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23 January 2021 Dear experts,

We are manufacturing company and not exceeds 250 of employees and we are taken food from outside canteen and we are avail ITC on Canteen bill.
same we are deducted canteen recovery from employees.
whether GST is payable on canteen recovery of employees.
if it is payable how to we pay the GST

With Regards
K Rama Krishna

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 January 2021 GST payable on canteen recovery from employees. Avail ITC on canteen bill to the extent recovery.

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CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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23 January 2021 GST payable on Recovery. If you are not paying on Recovery then you can not avail ITC

Lekhraj sood

Lekhraj sood (Expert)
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24 January 2021 For less than 250 workment , Factories Act doesn't make compulsory facility of canteen in the factory.Hence , in my view, you can not avail ITC. If canteen food is subsidized and some amount is recovered from employees then no gst is payable on such recovery if canteen facility is part of employment agreement and will then be covered in schedule III (Tata Motors-AAR MH).
But is you are recovering full cost from employees then it will be supply and GST will have to be levied (AAAR Kerala).

RAMAKRISHNA K

RAMAKRISHNA K (Querist)
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22 March 2021 Dear sir,
We have received notice from SGST ofiice FORM GST DRC-13(Notice to a third person under section 79(1)(c).
we have doubt regarding payment on above notice
how to make a payment, Please suggest

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