Question: What is the difference between collection from Salary and deduction from salary?
Answer: Collection from Salary is a situation which happens before the distribution of salary and Deduction from Salary happens after distribution of salary. In HCL Learning Ltd. Case, demand was raised by the department for notice period deductions. It is a deduction from the salary given to employees where they don’t serve the minimum notice period. It is a recovery from the salary already given to employees. Whether it should be liable for GST? It is important to decide whether there is a supply from employer to employee. Also, it is important to understand that any supply from an employer to an employee is not a no supply in GST. It is only the salary paid to the employee which is not regarded as a service. Any other supply by the employer to the employee is not covered in Schedule III. Hence, it is a taxable supply liable to GST. However, the matter is sub judice and shall be settled by higher courts soon.
