Levy of GST— In the instant case, the applicant (Astral) submitted that it provides canteen facility for its workers and staff. Astral submitted that it has more than 250 workers/employees and required to maintain the Canteen as per Factories Act, 1948 and in order to run the canteen, Astral has given the canteen service to a Canteen Service Provider and agreed to pay fix sum, per plate amount as per agreement.

Astral collects some portion of the total amount of food price to be paid to the Canteen Service Provider from its employees, by deducting it from the salary of the employees and balance payment is borne by Astral.

Question on which Advance Ruling sought:

1. Whether GST is applicable on amount representing the employees’ portion of canteen charges, which is collected by the applicant and paid to the Canteen service provider by company at Factory.

2. Whether GST is applicable on the amount representing the employee’s portion of canteen charges, which is collected by the applicant and paid to the Canteen service provider by company at HO.

3. If GST is applicable then, whether input tax credit (ITC) available charged by service provider on canteen facility provided to employees working in factory/HO?

4. If ITC is available, whether it will be restricted, to the extent of cost borne, by the company?

Astral has arranged a canteen for its employees, which is run by a Canteen Service Provider. As per their arrangement, part of the Canteen charges is borne by Astral whereas the remaining part is borne by its employees. The said employees’ portion canteen charges is collected by Astral and paid to the Canteen Service Provider. Astral submitted that it does not retain with itself any profit margin in this activity.

Held that— GST, at the hands of Astral, is not leviable on the amount representing the employees portion of canteen charges, which is collected by Astral and paid to the Canteen service provider.