No GST payable on recoveries made from the employees towards providing canteen facility

No GST payable on recoveries made from the employees towards providing canteen facility at subsidized rates in the factory and office The Authority of Advance Ruling ruled out that no GST would be payable on recoveries made from the employees towards providing canteen facility at subsidized rates in the factory and office. As per Authority, terms of Section 7 of the Central Goods and Services Tax Act, 2017 (CGST Act), for a transaction to qualify as a supply, if should be course and furtherance of business. The applicant was engaged in the business of developing, manufacturing, and marketing pharmaceutical products. The applicant is not supplying any canteen service to its employees in the instant case. The provision of canteen facilities to the employees is a welfare measure, also mandated by the Factories Act, and is not at all connected to the functioning of their business of developing manufacturing and marketing pharmaceutical products. Rather this canteen facility is provided to employees by the third-party vendors and not by the applicant. Therefore, in the subject case, the applicant is not providing any canteen facility to its employees, in fact, the applicant is a receiver of such services. Since the canteen services provided by the applicant to its employees cannot be considered as a "supply" under the relevant provisions of the CGST Act, 2017 and therefore the applicant is not liable to pay GST on the recoveries made from the employees towards providing canteen facility at subsidized rates.