Advance Ruling- Applicability of GST- 1. The applicant has hired a third-party contractor for providing canteen services to the employees in the factory. The third-party contractor raises an invoice on the company for provision of canteen services and recovered amount form the employees for provisions canteen facility. The total amount charged by the canteen service provider per employee per month is Rs.1,538.25/-. Out of the total canteen expense Rs.578/- - is recovered from each employee per month and the applicant bears the cost of balance INR 960.25 per month per employee.

2. The applicant has hired a contractor for providing transportation services to the employees of the company transport services per employee per month. The total amount charged by the bus transport service per employee Rs.2,277/-.Out of the total transportation expense only Rs.350/- is recovered each employee per month and the applicant bears cost of balance of INR 1927/- per employee per month.

The applicant seeks advance ruling on the following:-

1. Whether GST would be applicable on the amount recovered from employees for canteen facility provided to them.

2. Whether GST would be applicable on the amount recovered from employees for transportation facilities provided to them.

Authority for Advance Ruling, Andhra Pradesh held that:-1. A reference to the GST Policy wing Circular 172/04/2022 dated 6th July 2022, para 2, serial no 5, clarifies that any perquisites provided by the employer to its employee in are In lieu of the services provided by the employee to the employer in relation to the employment and therefore the perquisites provided by the employer to the employee will not be subjected to GST. As provision of canteen facility is a mandate as per Factories Act, 1948, we see that even considering the employee and employer transaction solely, GST is not applicable.

2. The main business of the applicant is manufacture of apparel and they are not engaged in the business of bus transportation. The transportation services is not a supply for the applicant made in the course or furtherance of business and the recoveries made by the applicant from their employees does not fall under the definition of supply under Section 7. Further, the transportation services are being supplies by the third-party to the applicant and they are receiver and not supplier of the same. Therefore, it can be concluded that the GST is not applicable for the recoveries from the employees for the transportation services provided to them.