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May 22, 2022

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GST applicable on value above Rs 50000, AAAR

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Transport facility provided by the employer to the employee: GST applicable on value above Rs. 50000, AAAR

M/s Beumer India Pvt. Ltd., Gurugram is engaged in the business of manufacturing/trading of Intralogistics Systems. He has hired motor vehicles on contract basis from a transport agency. They are using the said vehicles to provide transport facility to the employees as per their HR policy either at nominal cost, where the vehicles are air conditioned, or free of cost in other cases.

advance ruling questions

A. Whether GST is payable on the transport facility provided by the employer (applicant) to his employees to travel between predetermined places to his office, i.e. without any recovery from them. If so, what will be the taxable value of the said transaction?

b. Whether GST is payable on realization of nominal amount on account of air conditioning facility for transport facility provided by the employer (applicant) to his employees for traveling between predetermined places. If so, what will be the taxable value in the said transaction?

Decision by Advance Ruling Authority

A. “The above service is taxable under the provision of HGST/CGST/IGST Acts. Provisions under section 15 of the CGST I HGST Acts are applicable for assessment of such services.

b. “The above service is taxable under the provision of HGST/CGST/IGST Acts. The provisions under section 15 of the CGST/HGST Act are applicable for valuation of such services.

Ruling by the Appellate Authority for Advance Ruling

In view of the discussions and findings, we find that transactions executed in the course of contractual obligation of an agreement of employment are outside the purview of GST as clarified in CBIC’s press release dated 10.07.2017. We hold that the provision of transport facility to be provided by the appellant is different from the contractual obligation of the employer in the course of employment. The same will be liable to GST, on a value which exceeds the total gift value by up to Rs. 50000/- is paid by the appellant to the employee availing this facility in a financial year.



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