GST treatment of ESOP and RSU reimbursements hinges on whether only securities cost is paid or extra service charges are added. GST treatment of ESOP, ESPP and RSU arrangements issued by a foreign holding company to employees of an Indian subsidiary depends on the substance of the transaction. Where the subsidiary reimburses only the cost of shares or securities on a cost-to-cost basis, the transaction is treated as a transfer of securities and not as a taxable supply of goods or services, and GST is not leviable. If the foreign holding company charges any additional fee, markup or commission, that amount is treated as consideration for a facilitation service and GST applies on reverse charge basis.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
GST treatment of ESOP and RSU reimbursements hinges on whether only securities cost is paid or extra service charges are added.
GST treatment of ESOP, ESPP and RSU arrangements issued by a foreign holding company to employees of an Indian subsidiary depends on the substance of the transaction. Where the subsidiary reimburses only the cost of shares or securities on a cost-to-cost basis, the transaction is treated as a transfer of securities and not as a taxable supply of goods or services, and GST is not leviable. If the foreign holding company charges any additional fee, markup or commission, that amount is treated as consideration for a facilitation service and GST applies on reverse charge basis.
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