Gifts from the employers - GST provisions

Govt says gifts of up to ₹ 50,000 by employer exempt under GST

On Monday governmnt clarified that gifts worth up to ₹ 50,000 by an employer to its employees as well as free membership of clubs, health and fitness centres will not attract goods and services tax (GST). Also, the services by an employee to the employer in the course of or in relation to his employment is outside the scope of the new indirect tax regime, it said.

Any club, health and fitness centre membership provided by an employer to its all employees free of charge will not be subject to GST. The same would hold true for free housing as part of costtocompany package.

Also the finance ministry  said gifts of up to ₹ 50,000 in a year by an employer to his employee are outside the ambit of GST. "However, gifts of more than ₹ 50,000 made without consideration are subject to GST, when made in the course or furtherance of business," the ministry said. While the GST law does not define gifts, the ministry said for tax purposes gift is something that is made without consideration, is voluntary in nature and is made occasionally.