Sale of company assets to employees upon resignation - GST impact

[Balaji Srinivasamurthy]

Respected experts,

Requesting your opinion the impact of GST on the below scenarios on transfer of business assets (depreciation is claimed for the basic value) to employees upon officially relieving from the organisation:

1. Sale of assets where ITC is claimed (on the taxable value), eg. laptops

2. Sale of assets where ITC is not claimed, eg. mobile phones

3. Sale of assets in both the above 1 and 2 scenarios when there is WDV value and same is recovered from the full and final settlement of the employee

4. Sale of assets in both the above 1 and 2 scenarios when there is no WDV value and same is not recovered from the full and final settlement of the employee.

Thank for your support

AI Summary

GST on employers selling or transferring used business assets to employees: supply, valuation, ITC reversal (Sections 7 & 15) Employers transferring or selling used business assets to employees raises GST issues: whether the transaction is a 'supply' (generally yes under GST's broad scope), valuation (if ITC was availed GST is normally payable on open market value; if no ITC, taxable value may be the actual consideration or margin scheme under rules), and reversal/adjustment of input tax credit where applicable. A narrow exemption treats modest-value gifts by employers as not supply up to a statutory threshold. Disputes focus on double-taxation concerns, interplay of WDV and recovery in full-and-final settlement, and application of provisions governing ITC reversal, valuation and margin calculation to determine the GST payable.