GST applicable on Food Service provided in the Factory Canteen: AAR [Read Order]

The Authority for Advance Ruling, Uttarakhand (AAR) has ruled that GST is applicable on the food service provided in the factory canteen.

In the instant case,  Tube Investment India Limited  the applicant was a company manufacturing steel items . Applicant provided food service to employees from the canteen situated inside the factory premises which was dealt by contractors. Applicant  had recovered the nominal amount for providing food  from employees and engaging contractors for that. The applicant discharged  Goods and Service Tax (GST) for that,  but had not availed any Input Tax Credit (ITC) for that.  

In the instant case the applicant  had sought advance ruling on  whether providing food was considered as supply , whether GST was applicable on food service in canteen and on whether ITC could  be availed by the applicant.

K . Sivarajan who appeared for the applicant submitted that there  was no supply as the service of food  had established under mandatory requiremnt of factory act and there was no profit element also , and  also submitted that the ITC  must be available to the applicant.

 The Uttarakhand authority of advance ruling of  Anurag Misra and Ramesvar Meena ruled that the GST was applicable on the food service provided in the factory canteen and on the amount paid to the canteen service provideres and amount recoverd from the employees. It was held that the input tax credit couldnt be availed by the applicant.

To Read the full text of the Order CLICK HERE

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