Applicability Of GST To Employee Payments

1.INTRODUCTION

The Authority for Advance Ruling ("AAR") in the case of Bharat Oman Refineries Limited¹ ("AAR Ruling") has held that the following payments / benefits will be subject to Goods and Services Tax ("GST"):

1. payments made by employees to employers in lieu of serving the entire notice period;
2. insurance premiums recovered at actuals from existing employees for covering non-dependent parents and from retired employees for continuing to avail benefits under group insurance policies; and
3. value of canteen facility provided to employees and telephone charges recovered from them.

The AAR also answered specific questions on Input Tax Credit ("ITC") with respect to the above.