The authority’s rulings are case specific, but have persuasive value.A number of companies provide meal services to employees and a monthly charge is deducted from their salary towards this. The company had submitted that the canteen facility was not carried out as a business activity. “It is also not clear whether in such cases, GST rate would be 5% (as canteen) without input credit or 18% as outdoor caterer," said Pratik Jain, indirect tax leader at PwC.“Further, since the employer and employees are considered as 'related parties', it could lead to valuation disputes. Some of these B2C situations could also lead to a credit loss. Hence it is essential that all such activities are closely evaluated in advance.”

Source: Economic Times April 11, 2018 15:20 UTC