Government notifies conditions for pre-paid meal cards for the purpose of FBT

Source: Notification No. 1/2009, dated 5.1.2009

As per section 115WB(2)(B)(iii), inserted from the assessment year 2009-10, hospitality expenditure for the purpose of levy of FBT, does not include any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils other prescribed conditions. CBDT has now notified Rule 40E prescribing such conditions. Following conditions have been prescribed:

(i) The card shall be granted by the employer to its employees under a scheme framed by the employer specifying therein the circumstances under which the meal card can be used by the employee.

(ii) The card shall be issued by the issuing bank.

(iii) An employee shall not be issued more than one card.

(iv) The card shall bear the name of the employer along with the name, photograph and signature of the employee to whom the card is issued.

(v) The card shall be used only by the employee to whom the card is issued.

(vi) The card shall be used by the employee only for the purpose of purchasing ready to eat food or non-alcoholic beverage from a member establishment.

(vii) The aggregate amount of ready to eat food or non-alcoholic beverage purchased during a day by an employee shall not exceed one hundred rupees.

(viii) The details of each transaction of purchases made by the employee against the card shall be maintained by the employer and the member establishment in such manner and for such period as is required under the Act for any other similar transaction.