GST Applicable on ESIC & EPF?

[Orion Safety]

Dear Sir,

We are providing Menpower Services ( Un - Skilled (Safai Karamchari) & Semi - Skilled (Security Guards)) to an University in Punjab, I have been advised by the university that GST will not be applicable in case of ESIC & EPF contribution..I am not able to find any notification stating so, kindly advise is it right? With Regards...Neeraj

[KASTURI SETHI]

There is one case law of CESTAT New Delhi based on the judgment of Supreme Court pertaining to pre-GST era. In GST as per Section 15 of CGST Act, 2017 as amended, no deduction is allowed.

M/S M.P. SECURITY FORCE VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX [2019 (8) TMI 211 - CESTAT NEW DELHI]

 

[Himansu Sekhar]

But after amendment of sec.67 wef may 15, every reimbursable expenditure is includible. EPF and other charges are part of the gross salary. In my view these are includible in the gross value

[KASTURI SETHI]

I agree with Sh.Himansu Sekhar Ji. Period of case law is prior to May, 15.

[YAGAY and SUN]

Valuation in GST GST(Goods and Services Tax)

Compulsory Inclusions

Any taxes, fees, charges levied under any law other than GST law, expenses incurred by the recipient on behalf of the supplier, incidental expenses like commission & packing incurred by the supplier, interest or late fees or penalty for delayed payment and direct subsidies (except government subsidies) are required to be added to the price (if not already added) to arrive at the taxable value.

Hence, in our view, ESIC & EPF is includible.

[Ganeshan Kalyani]

Yes , ESIC, PF will form part of consideration and shall offered to tax.

[Himansu Sekhar]

During GST period, there is no doubt about the inclusion

[DR.MARIAPPAN GOVINDARAJAN]

I concur with the views of the experts

AI Summary

GST valuation: employer payroll contributions like ESIC and EPF are part of consideration and includible in taxable value.
Practitioners agree that ESIC, EPF and similar employer payroll contributions constitute part of the consideration for manpower services and are includible in the GST taxable value; pre GST case law suggesting exclusion is inapplicable under the post GST valuation regime, and reimbursable or employer borne payroll charges must be added to the transaction value when not already included.