canteen ITC
Query (Issue) Started By: – Madhavan iyengar Dated:- 11-1-2019 Last Reply Date:- 17-1-2019 Goods and Services Tax – GST
Got 6 Replies
GST
In case of a company which has provided a canteen facility ( ie eating place) with food served by caterer.
\nFirst Scenario
\nCaterer has following billing pattern he charges 5% GST. Company recovers part amount from employee
\nIssue: Whether Company can discharge GST on recovered amount from employee @5% or company has to discharge gst on full value of canteen bill
\nwill valuation rule come into play since employer and employee are related party
\nSecond scenario: Caterer charges 18% GST and Company discharges gst @18% on the entire canteen bill ( company recovers only part amount from employee)
\nin above case can company claim the itc of canteen ??? will it fall under the exception to sec 17(5) ie like supplies
\nReply By Natarajan Ramakrishnan:
\nThe Reply:
\nDear Mr Madhavan,
\nAs pointed out the employer and employee are related <\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n iyengar: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ther such supplies has to be treated as exempt supply for the purpose of Rule 42, 43 calculation. i.e. apportionment of common credits of taxable, exempted supply. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" canteen ITC Query (Issue) Started By: – Madhavan iyengar Dated:- 11-1-2019 Last Reply Date:- 17-1-2019 Goods and Services Tax – GSTGot 6 RepliesGSTIn case of a company which has provided a canteen facility ( ie eating place) with food served by caterer. First Scenario Caterer has following billing pattern he charges 5% GST. Company recovers … Continue reading “canteen ITC”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16145","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16145"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16145\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\nThe Reply:
\nthanks for your reply following clarifications required
\n a) what you are saying is GST is required to be paid whether there is part recovery \/ full recovery from employees for canteen and GST is required to be paid on the entire canteen bill ie the market value.
\n b) sec 17(5)(b) – credit is not allowed for out door catering except when an inward supply of goods or services
\n (b) the following supply of goods or services or both-
\n (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
\nif u see above extract if canteen service provider has charged gst 18% and company has discharged 18% gst from employees for canteen services provided then will it not fall in<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nSummarised –
\nSl.No
\nParticulars
\nTill 14.11.17
\nfrom 15-11-17 to 25-07-18
\nfrom 26-07-18
\nA
\nFor third party caterers
\n18%
\n18%
\n5%
\nB
\nWhether above (A) ITC eligible for Company
\nYes
\nYes – depends on tax rate opted by the company on its outward supply.
\nNo
\nC
\nEmployer – Canteen services liability
\n12%
\n5% without ITC
\n\t18% with ITC
\n5% without ITC
\nD
\nShould include in exempt TO
\nNo
\nYes\/No
\nYes
\nE
\nRule 42 applicability
\nNo
\nYes, if 5% option opted. All the common credits would be reversed in proportion to 5% without ITC supply
\nYes. All the common credits would be reversed in proportion to 5% without ITC supply
\nF
\nCost to Company
\n–
\nDepends
\n10% and reversal of common ITC.
\nReply By KASTURI SETHI:
\nThe Reply:
\nDear Sh.Spudarjunan S.,. In view of the substance and clarity in your reply, I would not hesitate to say tha<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n