Canteen operated within or Outside factory for employees attract GST on subsidised amount recovered [Read Order]

The Tamil Nadu Authority for Advance Ruling (AAR, Tamil Nadu) in the matter of M/s. Sundaram Clayton Limited held that Canteen operated within or outside factory for employees attract GST on subsidised amount recovered.

The Company viz. M/s. Sundaram Clayton Limited, 12, Chaitanya, Khader Nawaz Khan Road, Nungambakkam, Chennai 600006 (herein after referred to as “The Applicant’), are registered with GST and hold GSTIN 33AAACS4920J1ZJ. The Applicant is engaged in the manufacture and supply of die-casting parts for use in automobiles.

The Question and Ruling are:

Question: Whether recovery of subsidised value from employees for providing canteen facility would (a) amount to ‘supply’ under the CGST Act and (b) whether the recovery would attract Goods and Services Tax (GST) under the following two models:

(i) Canteen operated by the Applicant within the factory premises

(ii) Canteen run by Applicant’s subsidiary company operating within common premises

Ruling: For both models, the recovery of subsidised value from employees for providing canteen facility will amount to ‘supply’ under the CGST Act and GST is to be levied on the amount recovered by the Applicant from the employees towards provision of canteen facility.

For Official Ruling Download the PDF Given Below: