Taxability of various expenses reimbursed by employer

February 6, 2018   admin  GST Articles
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Transaction Nature of Transaction GST Applicability Input Tax Credit
Rent-a-cab Cab availed by employees for performing official duties, such as Tax department visits, etc. GST shall be under reverse charge applicable since services are performed by employee in course of employment. Hence, shall not be treated as supply in view of Schedule III. No credit shall be available due to restriction capped by section 17(5)
Local Conveyance Local conveyance availed by employees for performing official duties. GST shall be applicable Yes.
Tours, Excursions & Visits Cab facility & local conveyance availed by employees on tours. GST shall be applicable Yes, other than rent a cab.
Telephone/Mobile Reimbursement claimed by employees on actual basis. GST shall not apply since the expense in form a registered dealer. Yes, for use of taxpayer in course of employment.
Relocation Employees claim reimbursement of expenses, such as travel related expense, when relocated to a different city. GST shall be applicable Yes,
Birthday celebrations Gifts purchased by employees on marriage anniversary and thereafter reimbursement for the same is claimed as per HR policy of the company. GST shall not apply as the reimbursement is made as per the policy of the company and will thereafter fall under the purview of Schedule III. No credit shall be available in view of section 17(5)
Marriage Anniversary Gifts purchased by employees on marriage anniversary and thereafter reimbursement given to employees. GST shall not apply if such value of gift amount exceeds Rs.50,000 in a financial year in view of Schedule I. No credit shall be available in view of section 17(5)
Hotel Accommodations Reimbursement claimed by employees for hotel stay while on tour. GST shall apply if place of supply fall in state of recipient. Yes.
Restaurant services Reimbursement claimed by employees for foods and beverages. GST shall be applicable if such services are performed in the   course of carrying out the official work. No credit shall be available due to restriction capped by section 17 (5), However the position can be debated.
Offsite Tickets and hotel booked by employee on behalf of employer and thereafter reimbursement of the same is claimed. GST shall not apply as notional amount of such visits is added in the CTC of the employee and forms part of the employment contract. Yes, if services availed from registered dealer.

 

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