GST Applicability on Employee Reimbursement

[AnilKumar Vyas]

Dear Experts,

Please suggest, Is GST Applicable on following transactions:

• Payment to Employee for Vehicle running and maintenance charges at fix rate (example INR 8/- per KM) (Not part of Employee agreement and Salary offered)

  Example:

  We are paying INR 8/- per KM to X. during the month vehicle run 3,750 KM, Total amount paid INR 30,000/-

  Is company liable to pay GST on these reimbursement under RCM for supply from unregistered dealer?

• Payment to Employee for Vehicle petrol expenses at fix (Example 4,000/- per month) (It is part of salary offered but company separately paying for get income tax exemption by employee)

  Example:

  Mr. X monthly take home salary 40,000/- as per employment agreement. But company is paying 36,000/- as salary and paying 4000/- when employee request for reimburse vehicle fuel expenses.

  Is company liable to pay GST on these reimbursement under RCM for supply from unregistered dealer?

• Payment to employee for expenses done by employee on behalf of the company.

  Example:

  Mr. X is an employee and he purchased goods amount INR 6,000/- and get invoice in favor of company ( invoice not favor in invoice only show CASH MEMO) and made cash payment to supplier. Later X request to company for reimburse these expenses.

  Is company liable to pay GST on these reimbursement under RCM for supply from unregistered dealer?

Thanks for your valuable suggestion ........................

AI Summary

GST Applicability on Employee Reimbursements: Vehicle Expenses, Petrol Included in Salary, and Company Purchases Explained A discussion on the applicability of GST on employee reimbursements addressed three scenarios: fixed payments for vehicle expenses not included in salary agreements, reimbursements for petrol expenses included in salary, and reimbursements for company-related purchases by employees. Experts generally agreed that GST is not applicable to the first two scenarios as they are related to employment. However, for the third scenario, GST may apply if the supplier is unregistered, as it involves business transactions. The applicability of GST also depends on the suspension of certain provisions until June 30, 2018.