Canteen Services By Employer Charging Nominal Fees Is Liable To Be Taxed Under GST

Last updated: 13 January 2023
Quick Summary
The Uttarakhand Appellate Authority for Advance Ruling has determined that canteen services provided by an employer to employees, even when recovering a nominal fee, constitute a 'supply' under the GST Act. This is because the employer is providing these services in the course of business, and the nominal recovery counts as 'consideration'. Consequently, GST is payable on these services. Furthermore, employers cannot claim Input Tax Credit (ITC) on the GST paid for these canteen services, as it falls under a blocked credit category.

Court :
AAAR Uttarakhand

Brief :
The applicant recovers nominal amount from the employees for canteen facility - The applicant discharge GST @5% on the taxable value which is sum total of the cost of the canteen service provider plus 10% notional mark up.

Citation :

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