Quitting without serving notice period? You will now have to pay GST on salary in lieu of notice
Zee News
According to the latest AAR ruling, employees are liable to pay GST on salary in lieu of notice.
New Delhi: An Advance Authority of Advance Ruling (AAR) has ruled that Goods and Service Tax (GST) is applicable on various employee recoveries. According to the latest ruling, the tax will be applicable on notice pay, group insurance and telephone bill.
The AAR was hearing a case related to Bharat Oman Refineries, a subsidiary of state-owned Bharat Petroleum. With the latest ruling, the AAR has clarified that the employee is liable to pay GST on salaries received for the notice period.
According to a report by Economic Times, the AAR pointed that the company is "providing a service" to an employee in the case of notice pay, and that’s why GST should be applied on such transactions.
