2018 (4) TMI 582 – AUTHORITY FOR ADVANCE RULING – KERALA – 2018 (12) G. S. T. L. 350 (A. A. R. – GST), [2018] 2 GSTL (AAR) 23 (AAR) – Scope of the term supply – whether recovery of food expenses from employees for the canteen service provided by the applicant / company comes under the definition of outward supplies and are taxable under Goods & Service Tax Act? – Held that: – From the plane reading of the definition of “business”, it can be safely concluded that the supply of food by the applicant to its employees would definitely come under clause (b) of Section 2(17) as a transaction incidental or ancillary to the main business – Even though there is no profit as claimed by the applicant on the supply of food to its employees, there is “supply” as provided in Section 7(1 )(a) of the GST Act, 2017. The applicant would definitely come under the definition of “Supplier” as provided in sub-section (105) of Section 2 of the GST Act, 2017.
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The recovery of food expenses from the empl
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ofit margin. 3. The applicant has further submitted that the service provided to the employee is not being carried out as a business activity. It is according to the provisions of the Factories Act, 1948. As per section 46 of the said Act, any factory employing more than 250 workers is required to provide canteen facility to its employees. The applicant detailed the work as follows:- a) The space for the canteen is provided by the Company, inside the factory premises. b) The cook is employed by the Company and is paid monthly salary. c) The vegetables and other items required for preparing the food items are purchased by the Company directly from the suppliers. d) The number of times, the Canteen facility is availed, each day, by the employees is tracked on a daily basis. e) Based on the details above, the expenditure incurred by the Company on the vegetables and other items required for preparation of food is recovered from the employees, as a deduction from their monthly salary, in p
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g questions to be determined by the authority for Advance Ruling. "Whether reimbursement of food expenses from employees for the canteen provided by company comes under the definition of outward supplies as taxable under GST Act." 7. The authorised representative of the applicant was heard in the matter and the contentions raised were examined. 8. It is true that in the pre-GST period, vide Sl No. 19 and 19A of Notification No. 25/2012 ST dated 20.60.2012 as amended by Notification No. 14/2013-Service Tax dated 22.10.2013 the 'services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), including a canteen having the facility of air-conditioning or central air-heating at any time during the year' was exempted from service tax. But, there is no similar provision under the GST laws. 9. The term "business" is defined in Section 2(17) of the GST Act, which reads like this:-
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pply or service is for cash, deferred payment or other valuable consideration. " Even though there is no profit as claimed by the applicant on the supply of food to its employees, there is "supply" as provided in Section 7(1 )(a) of the GST Act, 2017. The applicant would definitely come under the definition of "Supplier" as provided in sub-section (105) of Section 2 of the GST Act, 2017. 11. The term 'consideration' is defined in Section 2(31) of the GST Act, 2017 which is extracted below: 'consideration' in relation to the supply of goods or services or both includes,- a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to,
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