GST on Free Supply to Employees - Goods and Services Tax - GST

A GST registered person provides free of cost, snacks and hot beverages to it s employees as per terms of appointment. The suppliers of such hot beverages are un registered persons. Please find below the extract from press release dt:10/07/2017:- Another issue is the taxation of perquisites. It is pertinent to point out here that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods or supply of services). It follows therefrom that supply by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST. Further, the input tax credit (ITC) scheme under GST does not allow ITC of membership of a club, health and fitness centre [section 17 (5) (b) (ii)]. It follows, therefore, that if such services are provided free of charge to all the employees by the employer then the same will not be subjected to GST, provided appropriate GST was paid when procured by the employer. The same would hold true for free housing to the employees, when the same is provided in terms of the contract between the employer and employee and is part and parcel of the cost-to-company (C2C). At one place in above press release, it is stated that services by employer to employees as per contractual obligation will not be treated as supply. In another place, it is stated that exemption of such transaction is available only if tax is paid at the time of purchase of inputs provided free of cost to employees. I request the experts to clarify the correct interpretation on free supply of snacks etc to employees but purchased from unregistered persons. The press release provides for tax exemptions if there is tax paid at the time of purchase. Assuming the supplier is under composition tax , there will be no tax collection by the vendor and hence condition that tax should be paid on procurement will not be satisfied. How to address the GST issues raised in my query.