AAR Rules: No GST on Amount Recovered from Employees for Staff Accommodation
The current application, dated 05.10.2024, has been filed by a company named M/s. Suzuki Motor Gujarat Pvt Ltd (Applicant) before the Gujarat Authority for Advance Ruling Goods and Services Tax (GST), D/5, Rajya Kar Bhavan, Ashram Road, Ahmedabad-380 009. Three hearings have taken place on the matter on 29.7.2025, 24.04.2025, and 8.04.2025.
The applicant has its jurisdiction office at Survey No. 293, Block No. 334 and 335, Becharaji, Village Hansalpur, Tal. Mandal, Ahmedabad, is registered with the department and possesses GSTIN 24AAUCS5797D2ZP (registration number). The applicant is involved in the manufacture of passenger cars and their parts at their factory, which is located in Gujarat.
As part of its policy, the company provides dormitory accommodation near the factory for its employees and student trainees. This facility is optional for employees but mandatory for student trainees. The company charges only a minor (nominal) amount for using the accommodation. The company (Applicant) recovers this amount from its employees and student trainees in return for providing such accommodation facilities. Further, the dormitory is meant only for employees and trainees, not for their family members. Also, if the employees do not want to choose this accommodation facility, then there is also an option for them to opt out of the facility simply by filing an exit form.
Regarding this accommodation facility, the applicant has some questions; hence, he has sought the present Advance Ruling No. Guj/Gaar/R/2025/29 (Application No. Advance Ruling/SGST&CGST/2024/AR/28), dated 22.08.2025.
Questions Asked by Applicant:
The applicant, M/s. Suzuki Motor Gujarat Private Limited has asked the following questions seeking the AAR Gujarat (No. Guj/Gaar/R/2025/29), dated 22.08.2025:
“Question 1. Whether GST is liable to be discharged on the amount recovered by the Applicant from its employees towards the accommodation facility provided to them?
Question 2. Whether GST is liable to be discharged on the amount recovered by the Applicant from student trainees towards the accommodation facility provided to them?
Question 3. Whether the Applicant is eligible to avail of the input tax credit of the GST charged by the third-party service provider for the accommodation facility provided to its employees.
Question 4. Whether the Applicant is eligible to avail input tax credit of the GST charged by the third-party service provider for the accommodation facility provided to student trainees?”
Answers Given by AAR Gujarat:
The Gujarat Authority for Advance Ruling Goods and Services Tax (GST) has given the following answers to the questions of the applicant:
Answer 1: No, GST is not liable to be discharged on the amount recovered by the Applicant from its employees towards the accommodation facility provided to them.
Answer 2: Yes, GST is liable to be discharged on the amount recovered by the Applicant from student trainees towards the accommodation facility provided to them.
Answer 3: Yes, the company (Applicant) is eligible to claim Input Tax Credit (ITC) in respect of the GST charged by the ASP for the accommodation facilities provided to permanent employees. Further, ITC is restricted to the extent of the cost borne by the applicant for providing accommodation services to its permanent employees, but proportionate credit is disallowed to the extent embedded in the cost of services recovered from such employees.
Answer 4: Yes, the company (applicant) is eligible to claim Input Tax Credit (ITC) of the GST charged by the third-party service provider for the accommodation facility provided to student trainees.
Citation: M/s. Suzuki Motor Gujarat Pvt Ltd (AAR Gujarat); Advance Ruling No. Guj/Gaar/R/2025/29; 12/08/2025
