Gifts by employer to employee

[Archna Gupta]

Dear Sir

Please clarify the below three queries:

1. Suppose an employer gives 60000/- in cash to his employee as gift. Will it cover in Sch-I?

2. If gifts are given in kind to its employees whether the employer can avail ITC paid at the time of purchase of these gift items?

3. If employer pays incentive to its employees which is not mentioned in the employment contract and not part of his CTC but due to trend in industry he gives some incentive to some of his employees. Whether this will be covered in Schedule-I?

Please reply.

Regards

Archna Gupta

AI Summary

Employer Gifts and GST: Over 50k Subject to Tax, Cash Exempt, Incentives as Compensation Examined An employer's gifts to employees were discussed regarding their treatment under the Goods and Services Tax (GST) framework. If a gift exceeds 50,000, it is subject to GST, and Input Tax Credit (ITC) can be availed. Cash gifts are not considered goods or services, thus not covered under Schedule-I of the CGST Act. Incentives not part of the employment contract and given as industry trends are considered compensation, not gifts. The forum clarified that gifts must be voluntary, without consideration, and not demanded by employees. Incentives in cash are not subject to GST, while those in kind might be.