Employee Transfer to Related Party company - Gratuity

[SARAVANAN RENGACHARY]

Dear Experts,

Two companies are related. i.e. ABC Private Limited and XYZ Private Limited.

An employee of the company (ABC) is permanently transferred to another company (XYZ). Subsequently, accrued Gratuity liability of the employee is also transferred from ABC to XYZ. Money is transferred.

Is GST applicable for this transaction? Please provide your views.

Saravanan.

[DR.MARIAPPAN GOVINDARAJAN]

In my view GST is not applicable.

[SARAVANAN RENGACHARY]

Sir, Thanks for your valuable comment.

Saravanan.

[Alkesh Jani]

Sir, I support the views of Sh. DR.MARIAPPAN GOVINDARAJAN Sir.

Thanks

[YAGAY and SUN]

In our view GST is not applicable on such transfer of employee and gratuity as well.

[KASTURI SETHI]

I support the views of all experts.

AI Summary

GST applicability on transfer of employee gratuity: not leviable where gratuity liability and funds move between related companies.
Whether GST applies when an employee is permanently transferred between related companies and accrued gratuity liability and funds are transferred; experts conclude GST is not applicable, treating the transaction as a shift of employment obligation and monetary settlement rather than a taxable supply.