Transport facility provided by Employer to Employee: GST applicable on value that exceeds Rs 50000, AAAR

M/s Beumer India Pvt. Ltd., Gurugram is engaged in the business of manufacturing/ trading Intralogistics systems. They have hired Motor Vehicles on contract basis from a Transport Agency. They are using said vehicles to provide transportation facilities to employees in accordance with their human resource policy at either a nominal cost where the vehicles are air-conditioned, or free of cost in other cases.

Questions of Advance Rulings

a. Whether GST is payable on transportation facility provided by the employer (Applicant) to its employees for travel between predefined location to its the office, free of cost i.e. without any recovery being made from them. If yes what would be the taxable value of the said transaction?

b. Whether GST is payable on the recovery of nominal amount on account of air conditioning facility for transportation facility provided by the employer (Applicant) to its employees for travel between predefined location. If yes then what would be the taxable value in the said transaction?

Ruling by Advance Ruling Authority

a. “The abovementioned Service is taxable under the provision of the HGST/ CGST/ IGST Acts. For valuation of such services the provisions under Section 15 of the CGST I HGST Acts are applicable”.

b. “The abovementioned Service is taxable under the provision of the HGST/ CGST/ IGST Acts. For valuation of such services, the provisions under Section 15 of the CGST/ HGST Acts are applicable”.

Ruling by Appellate Authority of Advance Ruling

In view of the discussions and findings, we find that the transactions executed in the course of the contractual obligation of an agreement of employment are beyond the scope of GST as clarified in the Press Release dated 10.07.2017, of CBIC. We hold that the provisioning of the transport facility provided by the Appellant is exclusive of the contractual obligation of the employer in the course of employment. The same shall be liable to GST, on a value that exceeds the total gift value up to Rs. 50000/- given by the Appellant to an employee availing this facility in a financial year.