As a business owner, you may have questions about how the Goods and Services Tax (GST) applies to canteen food provided by your company to your employees. Fortunately, an Advance Ruling has provided some clarity on the matter.
An Advance Ruling is a written interpretation of the GST law by the Authority for Advance Ruling (AAR). It provides clarity on how the GST law applies to a specific set of circumstances. The AAR is made up of a panel of experts who are authorized to give Advance Rulings.
The case in question involved a company that provided canteen services to its employees. The company charged its employees for the food, and the charges were included in the employees' payroll. The company wanted to know whether it was required to pay GST on the canteen charges.
The AAR ruled that the company was required to pay GST on the canteen charges. The reasoning behind the ruling was that the canteen services provided by the company to its employees were in the course or furtherance of business, and therefore constituted a supply of services under the GST law. The AAR also ruled that the charges paid by the employees were not reimbursements, but were consideration for the supply of services by the company.
Business owners who provide canteen services to their employees should take note of the AAR ruling. It means that if your company charges its employees for the canteen food, you will be required to pay GST on those charges. The GST rate applicable on canteen services is 5%.
It is important to note that if your company does not charge its employees for the canteen food, then there is no GST liability. This is because there is no consideration for the supply of services by the company.
The AAR ruling provides clarity on how the GST law applies to canteen food provided by companies to their employees. Business owners who provide canteen services to their employees should take note of the ruling and ensure that they are complying with the GST law.
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