Recovery of amount from employee on account of third party canteen services are taxble under GST.

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Last updated: 20 January 2021
Quick Summary
The Gujarat Authority for Advance Ruling (GAAR) has determined that when a company recovers a portion of the cost for third-party canteen services from its employees' salaries, this constitutes a taxable supply under GST. The company acts as an intermediary, and the recovery of employee contributions is subject to GST, even if the company doesn't make a profit on the service.

Court :
Gujrat AAR

Brief :
The applicant submitted that they are a 100% EOU, carrying out canteen facilities through third party canteen service at their factory. More than 500 employees are working in the factory. The model that they have in their factory is that the food is being offered to employees on subsidized rate whereby the employee’s share of the cost is being deducted from their salary.

Citation :
ADVANCE RULING NO. GUJ/GAAR/R/50/2020

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1 Year PLAN
1999
(Excl. of GST ₹359)

2 Years PLAN
3499
(Excl. of GST ₹629)

BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)

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