GST applicable on Non Monetary Benefits
Written by : SMTV24x7 | Mon, Aug 28, 2017, 05:47 PM
New Delhi Aug 28: A clarification was issued.
The Government has said that "Goods and Services Tax (GST) will be applicable on any non- monetary fringe benefit an employee gets from his employer".
Central Board of Excise and Customs (CBEC) has also said that "Monetary compensation paid to employees is not considered supply and will not attract GST".
The above issue was confirmed in the latest round of clarification issued in form of frequently asked questions (FAQ).The tax department has also said that salary paid to employees will attract the relevant income tax.
The answers have also revealed that "the fringe benefits are transactions in furtherance of business, even if supplied without consideration, the same is deemed supply" and will attract GST".
Some other doubts were clarified such as
* No GST is chargeable if free replacement is provided by a business to customers without consideration under warranty.
* Goods sent for a demonstration on returnable basis would not be considered supply, as there is no transfer of title, involved so no tax would be levied But, if some element of service is involved, the same will be a taxable supply.
* Equipment and instruments sent to manufacturers' factory for repairs and calibration within India on returnable basis would mean no sale has taken place. And challan for movement of goods without supply is to be issued for such items.
* Penal interest is a consideration for tolerating an act and it is a supply of service and will be taxable.
* GST has to be paid by a job worker on job work charges only.
* GST would be charged on labor charges in an invoice.
* Recipient of online database access services from a company abroad over the net would have to pay the applicable Integrated-GST (IGST) tax on reverse charge basis.
* In case the recipient is not registered, "the matter is treated as an online transaction and database access or retrieval services (OIDAR) and the OIDAR service provider is liable to take registration and pay tax".