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Recovery for foods to worker

Govind Kumar Agrawal (Service) (30 Points)

03 July 2017

We own a factory and provide workers food at a very concessional rates... Is the token amount recovered say Rs 1 per diet is taxable or not...

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2 Replies

Yash Lahoti (101 Points)
Replied 03 July 2017

Yes. Under GST, Tax is charged on supply of goods. This transaction falls under schedule 2 of GST Act.
However, if you do not charge them any amount (i.e. free food ) then it will not attract GST because you can classify it as a gift to employee, which is exempted upto 50,000 Rs in a financial year.

NITIN KOTAK (SERVICE) (1465 Points)
Replied 03 July 2017

If Canteen facilities is compulsory as any law than all input credit is eligible for canteen expenses. if Canteen is not madentory, then rules as per GST no tax liabilities on without consideration but you have to reverse input tax credit on such item.which provide with no consideration or under valuation.