We are engaged in manufacturing company located in SEZ . We have outdoor caterer who serves foods to our employee in company. On caterers bill they are not charging GST because we are in SEZ (All supplies made to SEZ Units are Zero rated supplies) . We are recovering very nominal value from employees in salaries for food arrangements to employees . Can you please suggest do we need to pay GST on recovery amount , what is the applicable GST Rate from 1.07.2017 if yes. to avoid if any GST Liability what is the actions we can take , if we stop recovery , we will not required to pay GST. Please provide the solution for all above queries with quoting respective circulars and case laws . thanks in advance for your support
24 November 2019
Supplies made to SEZ units are zero rated but the supplies made by an SEZ unit are subject to the general provisions of the GST regime and no distinct provisions or procedures have been effected for this.
Canteen Recovery from employee is subject to GST, employee & employer are distinct person and any transaction between distinct person is liable to GST ( Schedule 1 of CGST Act 2017 )
Services from employee to employer are specifically exempted but no such exemption has been given for services from employer to employee . Even though , you provide canteen facility without consideration , it will be subject of GST and valuation will be as per valuation rule ( Sec 15 - Rule 28-30)
Rate is 18% Since , being SEZ unit , you are not paying GST to caterer , ITC under 17(5) is not relevant
26 November 2019
Thanks for the reply , you mean even if we offer Canteen facility as free to employees we need to pay GST ? , If yes we need to pay GST on Supplier value ? . We have unit in DTA Unit as well where we use to provide Tea coffee facility to employees without any recovery means free . In such case also we need to pay GST ? In Nut shell all the companies who are providing canteen facility , tea coffee facility to there employees is liable to pay GST ?
26 November 2019
If we say our canteen food arrangements is part of Employee remuneration , it will not be subject to GST Liable ? please advise the same so that we will take necessary correction.
CAclubindia
