The ambitious goods and services tax may try to reach the prospect of salaries of employees as the implication of GST on the canteen food have given a hint on the changes hovering over the salary structure of the employees.
The Indian companies may have to start the exercise of salary structure shift for its employees and human resources benefits to the employees so that they are away from the unusual hits of goods and services tax.
The salary package includes reimbursement on telephone charges, home rentals, the medical premium for wide coverage, transportation and other miscellaneous services provided by the company to its employees. Although it is supposed that all these services might face goods and services tax upon them in near future due to the inclusion of certain provision.
The authority of advance ruling recently hoped up GST on the canteen food on employees as it ruled the case by mentioning that canteen charged taken from employees is liable for the GST.
A tax professional from the significant organization stated that “There are various recoveries that corporates make from their employees, which could be impacted by the recent AAR decision.”
Also, the companies may be recovering these tax from the salaries of employees without issuing any invoice making overall tracking difficult. It is also reminded from the experts that the GST may be applied even if the charges are not taken from employees.
Read Also: Expensive Food: Canteen Services for Employees Will Attract GST