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Informative

Nominal Salary Deductions for On-Site Factory Food Not Considered a ‘Supply’ Under CGST Act: AAR

Update / Judgement Date

25 Jul 2024

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Corporate ComplianceGSTLabour Laws

The Gujarat Authority for Advance Ruling (AAR) determined that nominal salary deductions for food provided at factory premises are not considered a supply under Section 7 of the CGST Act, 2017. This ruling means that these deductions do not attract GST. The AAR concluded that such transactions lack the elements of 'supply' since the service is provided without any profit motive and primarily for the employees' benefit, ensuring their welfare and compliance with labor laws