The Haryana Authority for Advance Ruling (AAR), observed that there is no GST on Amount collected from Employees for providing new ID Cards. The applicant in the present matter is Rites Limited.
Each employee of the Applicant company, in the event of loss of identity cards or when the card is damaged/becomes unserviceable, has to apply for re-issuance of fresh identity cards (ID Cards). The Applicant company shall issue the identity card post verification of the application from the manager concerned.
In such cases mentioned supra, i.e., on account of loss/mutilation of ID Card, the applicant company charges Rs. 100/- per card from the employee for the reissuance of the Id Card. Here it is pertinent to mention that no separate services of any third-party contractor are availed by the Applicant company to issue/to print identity cards instead the same are printed through in-house facility of Applicant company. The expense of printing the identity card is transferred by the Applicant to general expenses, i.e., printing expenses.
The applicant has sought advance ruling on whether the amount collected by the Applicant company from its employees in lieu of providing a new identity card (ID Card) would be chargeable to GST and if yes, rate of GST thereupon?
The Applicant is of the view that the amount received or reissuance of identity card is not chargeable to tax due to the reason that the applicant is not engaged in the business of printing the identity cards. The Applicant has formed the above interpretation of law based on the advance ruling order Emcure Pharmaceuticals Ltd, wherein it was held that definition of business (for the purposes of scope of ‘supply’) is attracted only if the impugned transaction has nexus with the principal business activity of the company.
The Coram comprising Sunder Lal, Member CGST and Kumud Singh, Member SGST observed that “The Id-card is reissued in case of loss of the same or the card is in non-serviceable condition. In this matter, the authority is of view that this transaction does not fall under the taxable event under the GST as it’s covered under the schedule Ill(l) appended with the CGST Act, 2017.”
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