Statutory canteen meal recoveries from workers not taxable as supply as activity mandated under Factories Act: AAR { Plantlipids (P.) Ltd., In re [2026] 189 taxmann.com 540 (AAR – KERALA}
Facts
Plantlipids Pvt. Ltd., a manufacturer with more than 590 workers, was statutorily required under Section 46 of the Factories Act, 1948 to maintain a canteen. It provided food to employees and recovered only a subsidised/partial amount from them
Issue
Whether the amount recovered from employees towards food supplied through the statutory canteen was liable to GST.
Held
The Kerala AAR held that the subsidised recovery from employees was not liable to GST, as the canteen was maintained pursuant to a statutory obligation and formed part of the employment-related welfare arrangement, rather than an independent business activity or taxable supply.
