GST DAILY – 303

The Gujarat AAR, in the case of M/s Allemia India Private Limited, ruled that the deduction made by the Applicant from employees’ salaries for food provided at the factory premises does not qualify as a “supply” under Section 7 of the CGST Act and the GGST Act. Further, the Applicant is entitled to ITC on GST charged by the canteen service provider (“CSP”), in accordance with Section 17(5)(b) (amended from February 1, 2019) and CBIC Circular No. 172/04/2022-GST dated July 6, 2022, read with Section 46 of the Factories Act, 1948 and Gujarat Factories Rules, 1963. However, ITC is restricted to the cost borne by the Applicant, excluding the proportionate credit embedded in amounts recovered from employees.