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 transfer of business assets: valuation depends on whether input tax credit was claimed, affecting taxable value.
When an employer transfers company assets to departing employees, GST treatment hinges on whether input tax credit was claimed: if ITC was availed, taxable value is the open market value even for discounted or free transfers; if ITC was not availed, GST is limited to the actual consideration received. Depreciation and written down value affect the computation but do not change these valuation principles. Applicable rules include valuation provisions, margin taxation where no ITC was claimed, and mechanisms for reversal or adjustment of previously availed input tax credit, with a narrow exemption for nominal employer gifts.