Hoerbiger India GST Advance Ruling Withdrawal Explained
The Authority for Advance Ruling allowed the company to withdraw its application, meaning no decision was made on canteen or transport taxability.
- Ruling
- NO.GST-ARA- 74/2022-23/B- 621, Mumbai, dt. 18/11/2025
- Dated
- 18 Nov 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Hoerbiger India asked if employee canteen and bus recoveries are taxable services.
- The company also asked if they could claim input tax credit on these services.
- The applicant voluntarily withdrew the request before the authority issued a decision.
- The authority closed the case without providing any guidance on the tax issues.
In short
Hoerbiger India Pvt Ltd asked the Maharashtra Authority for Advance Ruling (AAR) whether deducting money from employee salaries for canteen and bus services counts as a taxable supply under the Goods and Services Tax (GST) law. They also wanted to know if they could claim input tax credit on the bills paid to canteen and transport providers. Before the authority could answer, the company withdrew its request.
What has changed
How it worked before
Businesses have long debated whether recovering costs from employees for mandatory facilities like canteens or buses constitutes a taxable service or is simply part of the employment contract.
What has changed
Nothing changed because the authority did not issue a ruling. This order is purely procedural and does not provide any legal guidance or tax interpretation for other businesses.
Who this affects
Manufacturing businesses that provide canteen or transportation facilities to employees and recover costs through salary deductions.
An example
Imagine a factory owner, ABC Manufacturing, who wants to know if they must pay GST on canteen deductions. They might look at this order hoping for an answer. Because Hoerbiger India withdrew their request, ABC Manufacturing remains in the same position as before and must consult their own tax advisor for guidance.
What you should do
Do not rely on this order for your tax planning. An advance ruling is only binding on the business that requested it, and since this case was withdrawn, it holds no legal weight for anyone else.
If you do nothing
If you assume this order supports a specific tax position, you risk miscalculating your GST liability. Tax officers are not bound by withdrawn applications and may penalize you for unpaid taxes if your interpretation is found to be incorrect during an audit.
The terms explained
- Advance Ruling
- A formal decision from tax authorities on how GST laws apply to a specific business transaction.
- Input Tax Credit
- The ability to reduce the tax you pay on your sales by the amount of tax you already paid on your business purchases.
- Supply of Service
- Any activity or transaction that is subject to GST because it involves providing a service to another party for a fee.
The ruling in detail
Authority for Advance Ruling
M/s. Hoerbiger India Private Limited
NO.GST-ARA- 74/2022-23/B- 621, Mumbai, dt. 18/11/2025 · Maharashtra
Questions before the authority
- Whether the nominal amount recovered by the Applicant from the salary of the Employees for providing the canteen facility in the factory premises would be considered as a 'supply of service' under the provisions of the Central Goods and Services Tax Act, 2017?
- a. In case answer to above question is yes, whether GST is payable thereon.
- b. Whether input tax credit (ITC) is available to the Applicant on GST charged by the Canteen Service Providers for providing the canteen services?
- Question 2: Whether the nominal amount recovered by the Applicant from the salary of the employees for providing the non-air-conditioned bus transportation facility would be construed as 'supply of service' under the provisions of the Central Goods and Services Tax Act, 2017?
- a. If answer to above question is yes, whether GST is payable thereon?
- b. Whether input tax credit (ITC) is available to the Applicant on GST charged by the Transport Service Providers for providing the bus transportation services?
Facts
The applicant is engaged in the manufacture and sale of engineering goods and provides canteen and bus transportation facilities to its employees. The applicant sought an advance ruling on whether the recovery of nominal amounts from employee salaries for these facilities constitutes a supply of service and the eligibility of input tax credit on the related services. Subsequently, the applicant submitted a request to withdraw the application.
Ruling
The Authority for Advance Ruling allowed the applicant to withdraw the application voluntarily and unconditionally. Consequently, the authority did not proceed to determine the merits of the questions raised or provide a ruling on the taxability or input tax credit eligibility.
Reasoning
The applicant filed a letter dated 05.11.2025 requesting to withdraw the application. The Authority for Advance Ruling exercised its discretion to allow the withdrawal of the application voluntarily and unconditionally without examining the merits of the case. The order was issued under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017.
Provisions relied on
- Section 98 of the Central Goods and Services Tax Act, 2017
- Section 98 of the Maharashtra Goods and Services Tax Act, 2017
For the practitioner
This order provides **no substantive guidance** on the taxability of canteen or transportation recoveries from employees. It serves only as a procedural record that the application was **withdrawn by the applicant** before a ruling could be issued. Practitioners should note that this case does not establish a precedent for the issues raised.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/withdrawal_order_hoerbiger_india_private_limited-compressed_1.pdf
Legibility of the scan, as read: high.
Prepared 15-10-2026.
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