9911796707
TMI Blog2025 (1) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of such services in terms of Section 16 of CGST Act, as the same are used in relation to furtherance of business. Levy of GST - recoveries made by the Applicant from the employees for providing canteen facility to its employees - free of cost bus transport facilities provided by the Applicant to its employees - Exemption under the Sl. No. 15 of N/N. 12/2017 Central Tax (Rate) dated 28 June 2017 - HELD THAT:- The respondent has arranged free of cost transportation facility to its employees in non -AC bus, which is provided by a third party vendor, as a part of its HR policy and as per employment agreement. These facts are not in dispute. The perquisite of providing free bus transportation by the respondent to their employee in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 100 of the CGST Act, 2017 and the GGST Act, 2017 by The Assistant Commissioner, CGST, Ahmedabad North Commissionerate (hereinafter referred to as Appellant) against the Advance Ruling No. GUJ/GAAR/R/2022/22 dated 12.4.2022. The appeal is filed in terms of the authorization under Rule 106 (3) (a) of the CGST Rules, 2017. 3. Brief y, the facts are enumerated below for ease of reference: The respondent [M/s. Emcure Pharmaceuticals Ltd], provides canteen bus transportation facility to its employees as a part and parcel of the agreement with the employees; that it is also based on their HR policy; the canteen facility is provided at a subsidized rate; transportation facility is provided with no cost to employees; that the bus used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arranged free of cost transportation facility to its employees in non-AC buses which is provided by third party vendor as part of its HR policy this facility is as per their agreement with the employees; GAAR is not inclined to hold the activities provided by M/s. Emcure to its employees to be activities made in the course of furtherance of business to deem it as supply that the proviso to section 17 (5) (b) (iii) is not connected to this sub-clause of section 17 (5) (b) (i) cannot be read into it; that ITC on motor vehicles for transportation of persons having approved seating capacity of more than 13 persons is not blocked under section 17 (5) of the CGST Act, 2017. 6. The GAAR, vide the impugned ruling dated 12.4.2022, held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acility provided to its employees, is erroneous. 8. The respondent has also filed his cross objection, wherein he has raised the following averments viz ruling was sought as to whether free of cost bus transportation facility, provided by Emcure to its employees is taxable; that Emcure had received the services from third party service providers on which GST was levied; that the ruling nowhere specifies GST exemption for bus transporter who is the third party service provider; that Emcure as an applicant cannot seek ruling on behalf of others ie third party bus transporter service provider; that GAAAR has already held that recovery from employee would not tantamount to supply; that the arrangement of free bus transportation facility to empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal wherein the main issue raised is that the in the impugned ruling at para 15 (2) that GST at the hands of M/s. Emcure is not leviable on free bus transportation facility provided to its employee is erroneous ambiguous. The departmental appeal has further averred that on one hand the GAAR held that GST at the hand of M/s. Emcure is not leviable on free bus transportation on the other hand held that ITC on GST paid on hiring of bus is admissible. The next ground is that ITC would only be admissible to M/s. Emcure when GST at the appropriate rate is paid by them to third party service providers. 11. The departmental appeal thereafter goes on to state that since the respondent does not recover any amount from its employees for providing free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices rendered by employee to employer provided they are in the course of or in relation to employment. 2. Any perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are in lieu of the services provided by employee to the employer in relation to his employment. It follows therefrom that perquisites provided 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 when the same are provided in terms of the contract between the employer and employee. 13. Thus, the perquisite of providing free bus transportation by the respondent to their employee in terms of contractual ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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