New Delhi: With the recent notification of the Central Board of Indirect Taxes and Customs (CBIC), has been now clarified that there is no need for employees to pay the Goods and Services Tax on the perks given by employers.
The CBIC has clarified that an employee's service to his employer during employment does not fall in the ambit of the GST.
The circular has also brought many clarifications on the implementation regarding the decisions the CBIC had taken at the GST Council meeting held in Chandigarh last week.
"Perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the employee will not be subjected to GST when the same is provided in terms of the contract between the employer and employee," the circular read.
The applicability of GST on perks had long been under contention as previous rulings and clarifications had set out the principle that a transaction between two individuals would still attract GST even if there were no considerations involved.