gst rate for employee recovery

[Madhavan iyengar]

A Company recovers from its employees ₹ 500 per month per employee towards bus transportation

Query: What is the GST rate to be applied on the bus amount recovery is the rate of tax to be applied on basis of bill received from bus contractor @12% or we need to charge GST@18% being general service rate

AI Summary

GST rate on employee transport: supply classification determines whether contractor rate or employer support-service rate applies.
Determination of the applicable GST rate for employer recoveries for employee bus transport depends on whether the recovery is a passthrough of the contractor's service or a support service supplied by the employer; alternative classification under HSN 9964(vi) may attract lower notified rates. Where classification is uncertain, seeking an Advance Ruling is advised, and paying tax at the higher applicable rate under protest preserves rights pending resolution. If the employer bears the cost without recovery, GST liability depends on whether the benefit is treated as untaxed salary or as a taxable supply by the employer.