Various advantages such as free beverages, canteen facilities, free parking space, journal subscriptions or even group medical insurance furnished via businesses to its employees for the contractual agreement between the two, are not for Goods and Services Tax (GST).
The same GST circular on the taxability of the perquisites to the employees would be provided by the CBIC answering the clarification seeks from its administrator to assuring a constant execution of the law.
Tax expert mentioned that “There was a view in some quarters, that since employer and employee constitute related parties any perquisite provided by the former to the latter should attract GST on the fair market value. This apprehension has been put to rest by the clarification,”
In the former time in the year 2017, a press note given by CBIC was on identical directions, however, a formal circular weight it more.
Tax experts specified that the term contractual agreement would be used in the circular, the same can pose a wide application and cover the policies of HR in general.
Read Also:- Goods and Services Tax Applicability on Employees Structure
To explain it the free food furnished to all the employers does not form any part of the employment contract, however the same in general corporate policy could be opposed to being protected and as these would not be compiled with GST.
Various firms seek the advance rulings on which a normal sum covered by the employer like transport facilities or canteen facilities, which is passed on to the 3rd party provider would be compiled to GST.
These must not be GST levies however a particular clarification would support them.
