GST on canteen charges recovered from employees

Many companies provide food services, like a canteen, for their workers and employees. This is a common practice in manufacturing industries. The meals can be either free or have a small cost for employees. Usually, companies hire external caterers on a contract basis to manage this service. Know more about GST- Input Tax Credit on Canteen facility.

Confusion arises about the following 2 issues:

1. Should the company charge GST on the amounts recovered from employees as canteen charges?
2. Can the company claim an Input Tax Credit of the GST charged by the caterer on catering charges?

There are plenty of advance rulings on these issues in various states. We have compiled it for you!

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Conclusion

The rulings on GST applicability and Input Tax Credit (ITC) for canteen charges collected from employees vary across states and circumstances. While some cases mandate GST on canteen charges and allow ITC, others exempt the charges from GST. Companies need to assess their specific situations and adhere to relevant GST regulations to ensure compliance and minimize financial implications.

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