GST on certain Reimbursement to Employee and Schedule I transactions

[V Rajalakshmi]

The employer is recovering a certain amount from the employee for the following reasons

1. Telephone Exps

2. Notice Pay

3. Canteen Exps

4. Group Medi claim Exps.

Please note that in all the above cases the amount incurred by the employer is not added to the salary income of employees.

Some people are considering it as schedule 1 transactions and paying GST and Some of them are of the view that it will not fall under schedule 1 supply kindly update your views with the latest decided case law if any.

[Shilpi Jain]

Notice pay not liable - high court decision available in this regard under ST.

THE OTHERS - a view can be taken that the amount which the employer pays is only as a reimbursement to the actual supply and there is no actual supply by employer to employee.. there are a couple of advance rulings in this regard

Beamst way out could be to make them part of the CTC

[Ganeshan Kalyani]

Notice pay recovery is in connection with employment agreement where there is employer employee relationship. Gst is not applicable in such case. However, another view is that the employer tolerates an act of employee of not serving the notice period. Tolerating an act is taxable under GST. In my view GST is not applicable on notice pay recovery.

AI Summary

Debate on GST Liability for Employer Cost Recoveries: Notice Pay, Telephone, Canteen, and Medical Claims. An employer is recovering costs from employees for telephone expenses, notice pay, canteen expenses, and group medical claims, without adding these to the employees' salary income. There is a debate on whether these should be considered Schedule I transactions under GST, which would require GST payment. One opinion suggests that notice pay is not liable for GST, supported by a high court decision, while others argue these are reimbursements and not actual supplies. Another perspective is that tolerating an employee not serving a notice period could be taxable. The suggestion is to include these in the cost to company (CTC).