ADVANCE RULING

Facts of the case -

• M/s Amneal Pharmaceuticals Private Limited is engaged in the manufacturing of pharmaceutical products. 
• He had filed an application with the AAR to clarify whether GST would be leviable on mere arranging a canteen facility, i.e., provision of canteen service through a third-party vendor where Appellant recovered partial amount from employee's salary and subsequently paid to the canteen service provider. 
• The AAR pronounced that GST would be applicable on the amount recovered from employees. Aggrieved with the ruling, the Appellant preferred an appeal before the AAAR. 

Submissions - 

• The canteen facility is being provided in the backdrop of mandate under Section 46 of the Factories Act, 1948.
• The applicant is merely facilitating between the employee and the canteen service provider.
• It is collecting employee's share and paying it to the service provider.
• It collects employee's share and delivers them to the service provider and is not covered by the scope of supply as envisaged in Section 7 of the CGST Act, 2017 and is not undertaken in the course or furtherance of business.
• On inward supply of canteen, it has not been availing the input tax credit. 

Judgements-

• The Appellate Authority observed that the applicant does not supply any goods or services to its employees against the amount collected from employees. 
• He collects employee's share and, along with his share, transfer the amount to the service provider. 
• He neither keeps any margin nor offering them food or canteen service to its employees. 
• Still, it is a canteen service provider who has been providing these services. 
• Accordingly, it concludes that the Appellant is not carrying out the said activity [i.e., collecting employee's portion of the amount and handing over it to the canteen service provider] for any consideration. 
• Such transactions are without involving any supply from the Appellant to its employees, and therefore, GST is not leviable thereon.