GST not leviable on amount collected from employees for canteen charges – Dramatic Interpretation of with colon (:) and semi colon (;)

Last updated: 31 August 2021
Quick Summary
The Gujarat Authority for Advance Ruling (AAR) has determined that Goods and Services Tax (GST) is not applicable to the portion of canteen charges collected from employees by an employer. The ruling clarifies that when an employer recovers a nominal amount from employees for using the canteen facility and pays the service provider, this recovered amount is not subject to GST. However, the input tax credit (ITC) on the GST paid by the employer for the canteen facility itself is considered blocked credit.

Court :
Gujarat Authority of Advance Ruling

Brief :
The Authority for Advance Ruling ("AAR"), Gujarat vide Ruling no. GUJ/GAAR/R/39/2021 dated July 30, 2021 held that, no GST is leviable on amount representing the employees portion of canteen charges, which is collected by the employer and paid to the canteen service provider.

Citation :
GUJ/GAAR/R/39/2021

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Bimal Jain
Published in GST
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