The Telangana Authority of Advance Ruling (AAR) held that GST is exigible upon EPF, ESI, Salary, or Wages reimbursed via Hospital.
The petitioner, Bhagyalakhsmi Devamma Vangimallu who is the owner of Versatile Resource Solutions has entered into a contract with M/s. Asian Institute of Gastroenterology Private Limited, Somajiguda, Hyderabad for furnishing the housekeeping services. According to the case of the petitioner, he is engaged in the Housekeepers and supervisors to maintain along with that support the medical team of the Hospital in maintaining cleanliness, who undergoes 24 Hours of the services on a shift basis.
It is the choice of the petitioner that as the salary or the wages gets set out through the hospital management along with that their EPF and ESI which comes under the statutory payments thus these amounts reimbursed through the Hospital management could not form the value of supply.
The petitioner seeks for the advance ruling upon the case that if the petitioner is subjected to furnish the tax upon the concern of the wages or salaries, EPF or ESI, and others which are reimbursed through the customer.
The applicant stated that they have been passing the ESI and PF salaries etc to the housekeeping which they have received from the contractee and this same is to be done to the people employed.
But they are imposing the commission or the charges with respect to these bills. Thus with respect to it, they are the real agents of the contactee, apart from that the amounts collected through them and passed on to the employees do not build the turnover through their hands.
The two judges S.V.Kasi Visveshwara Rao and B.Raghu Kiran held that the petitioner was not the real agent under GST law. Moreover, the deductions which are present beneath Section 15 of the CGST Act do not include the amounts pertaining to EPF, ESI, Salary, or Wages. Hence the complete amount obtained through the Hospital is exigible to CGST / SGST Act 2017.
