Services provided to employees

[Kaustubh Karandikar]

XYZ Ltd. is taking car on lease and giving to employee for his use, supplying food to employees. All this is part of the employment terms as perquisites therefore no consideration is received from the employees. Is XYZ liable to pay GST on it since employer and employee are treated as related persons?

[Guest]

Dear sir,

the perquisites which are form part of employment agreement are not liable to gst.

Because under schedule 3 the services provided by the empolyee to the empolyer are not liabe to gst.Now the perquisites{form part of empolyment agreement} which are provided by the empolyer to the empolyee is considered as salary for the services provided by the empolyee.

[Ganeshan Kalyani]

Since, the benefits forms part of the salary it is not exigible to GST.

[Ganeshan Kalyani]

However, there is a chance of applicability of GST, because schedule III of CGST, Act treats "services by an employee to the employer ....." neither as a supply of goods or services and not vice-versa.

[Ganeshan Kalyani]

Refer issue id: 114956

AI Summary

GST Implications on Employee Perquisites: Leased Cars and Food Under Employment Terms Analyzed in Light of Schedule III CGST Act XYZ Ltd. provides leased cars and food to employees as perquisites under employment terms without receiving consideration. The query is whether GST is applicable since employer and employee are considered related persons. Responses indicate that perquisites forming part of the employment agreement are not liable for GST, as they are considered part of the employee's salary. However, there is a potential for GST applicability, as Schedule III of the CGST Act treats services provided by an employee to an employer as neither a supply of goods nor services, but does not explicitly address the reverse.