Applicability of GST

[Vineet Kt]

Sir,

I am employee of a bank and had availed furniture reimbursement facility from the Bank. Now I have resigned and the bank is charging gst on the wdv of the household items so that the ownership can be transferred in my name. Please clarify if gst is applicable or not. No ITC was claimed as the items were purchased in the pre-gst regime(vat).

[Alkesh Jani]

Sir,

Although No ITC was taken, GST is applicable on transaction value.

Thanks

[Ganeshan Kalyani]

GST will be charged / collected from you by the Bank and pay to the government. The tax can be inclusive of the price or exclusive. It depends upon the policy of you organization.

[Vineet Kt]

Sir,

I asked this because isnti it violating the very principle of double taxation which gst was supposed to remove. The tax has alrwaal been paid on the full value in the form of VAT. The Bank is not basically supplying me any new goods. Moreover, since it is a off transaction for the Bank and is not a regular business transaction.

[Ganeshan Kalyani]

They had two option - one claim input tax credit on the asset purchased and second capitalize it and claim depreciation benefit under income tax. Either way there was benefit. Further, the supply in your case is in course of the business hence GST would be applicable and regarding input tax credit , in my view if you bank had taken credit in past then the gst payable in only on the differential value.

[Vineet Kt]

Thanks Sir. Understood now.

[Ganeshan Kalyani]

Welcome Sir.

[DR.MARIAPPAN GOVINDARAJAN]

Nice explanation by Shri Ganeshan

[Ganeshan Kalyani]

Thank you Sir.

[Nash Industries I Pvt Ltd]

At the time of purchase of asset, the asset was in the name of the employer and the depreciation was claimed by the employer. The value of the asset was treated as perks in the hands of the employee and IT was charged.

At the time of transfer of asset (pre GST), VAT is charged on the value of the asset transferred. Under GST, instead of VAT, CGST+SGST is charged.

There is no double taxation in either case.

Further, to clarify, whether VAT or GST, there is no question of double taxation as the tax is on the value added (by the assesse), though the full tax is borne by the common man.

VAT/GST is a benefit to the business community as their net tax is reduced whereas for the common man, the price is reduced (which before and after GST, the tax is borne by him). This is an indirect tax.

Regards

S.Ramaswamy

AI Summary

GST applicability: GST applies to employer-to-employee asset transfers treated as a supply made in course of business. Where an employer transfers furniture to an employee, GST is chargeable on the transaction value if the transfer constitutes a supply in the course of business, irrespective of whether input tax credit was claimed at purchase; if credit was taken, GST liability on transfer is limited to the differential value. VAT previously applied in similar transfers pre-GST, and GST (CGST plus SGST) replaces VAT without constituting double taxation, while income-tax consequences such as depreciation and perquisite treatment remain separate.