https://www.taxtmi.com/caselaws?id=420105 The AAAR Gujarat issued a split decision on GST liability for notice pay recovery from employees leaving without completing contractual notice periods. One member held that the employer's tolerance of contract breach constitutes a taxable supply not covered by Schedule III exemptions, making the pharmaceutical company liable for GST on liquidated damages received. The other member ruled that notice pay recovery merely extinguishes employee obligations without creating independent supply activity, thus falling outside GST scope under Section 7. Due to the disagreement between members, Section 101(3) of CGST Act applies for further resolution. en-us Wed, 09 Feb 2022 00:00:00 +0530 Wed, 02 Apr 2025 12:08:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=420105 The AAAR Gujarat issued a split decision on GST liability for notice pay recovery from employees leaving without completing contractual notice periods. One member held that the employer's tolerance of contract breach constitutes a taxable supply not covered by Schedule III exemptions, making the pharmaceutical company liable for GST on liquidated damages received. The other member ruled that notice pay recovery merely extinguishes employee obligations without creating independent supply activity, thus falling outside GST scope under Section 7. Due to the disagreement between members, Section 101(3) of CGST Act applies for further resolution. Case-Laws GST Wed, 09 Feb 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=420105