GST is applicable on payment of notice pay by an employee to applicant employer in lieu of notice period under clause 5 (e) of Schedule II of CGST Act.
Levy of GST— In the instant case, applicant is the company that owns and operates Bina Refinery.
Question raised before this authority is as follows—
1. Whether GST is applicable on payment of notice pay by an employee to the applicant-employer in lieu of notice period under clause 5(e) of II of GST Act?
2. Whether GST is applicable on the amount of premium of Group Medical Insurance Policy recovered at actuals from non-dependent parents of employees, and retired employees those who are covered under the said Policy ?
3. Whether GST is applicable on recovery of nominal amount for availing the facility of Canteen at the Refinery at Bina when it is not a supply as per clause I of schedule III of GST Act ?
4. Whether GST is applicable on recovery of telephone charges from the etitployees over and above the fixed rental charges payable to BSNL. ?
5. Whether full ITC is available to the applicant in respect of question Nos. II, III & IV, or ITC will be restricted to the extent of GST borne by the applicant-employer ?
6. Whether the provision of canteen services to all the employees without charging any amount (free of cost) will fall under para 1 of schedule III of GST Act and will nut he subjected to GST?
7. If reply to Q. VI is yes, whether in view of the explanation to Section 17(3) of GST Act, ITC shall be available to the applicant on the goods and services used in the activity of provision of free canteen services to the employees?
Held that— In respect of question no. 1, it is held that GST is applicable on payment of notice pay by an employee to applicant employer in lieu of notice period under clause 5 (e) of Schedule II of CGST Act.
In respect of question no. 2, it is held that the premium of Group Medical Insurance Policy recovered by applicant from the non-dependent parents of employees & retired employees will fall within the ambit of supply and is liable to GST.
In respect of question no. 3, it is held that as per Section 15(1) of GST Act, the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply where the supplier and the recipient of the supply are not related, and the price is the sole consideration for the supply.
In respect to question no. 4, it is held that the applicant-company is liable to pay GST on the amount recovered from its employees towards telephone charges at actuals.
In respect of question no. 5, it is held that the applicant shall be eligible to claim Input Tax Credit in respect of premium paid to insurance company to the extent of its further supply. The Applicant shall not be eligible for the ITC on in respect of canteen services. In respect of telephone charges paid to BSNL, the applicant shall be eligible to claim Input Tax Credit, as telephone charges are not covered by the provisions of Section 17 relating to blocked credit.
In respect of question number 6 canteen services provided to the employees are to be treated as supply, even if there is no consideration. It will be liable to tax as per value determined in accordance with Rule 28.
In respect of question number 7, the reply to this question is already duly covered by reply to question number 5.
GST is applicable on payment of notice pay by an employee to applicant employer in lieu of notice period under clause 5 (e) of Schedule II of CGST Act.
Levy of GST— In the instant case, applicant is the company that owns and operates Bina Refinery.
Question raised before this authority is as follows—
1. Whether GST is applicable on payment of notice pay by an employee to the applicant-employer in lieu of notice period under clause 5(e) of II of GST Act?
2. Whether GST is applicable on the amount of premium of Group Medical Insurance Policy recovered at actuals from non-dependent parents of employees, and retired employees those who are covered under the said Policy ?
3. Whether GST is applicable on recovery of nominal amount for availing the facility of Canteen at the Refinery at Bina when it is not a supply as per clause I of schedule III of GST Act ?
4. Whether GST is applicable on recovery of telephone charges from the etitployees over and above the fixed rental charges payable to BSNL. ?
5. Whether full ITC is available to the applicant in respect of question Nos. II, III & IV, or ITC will be restricted to the extent of GST borne by the applicant-employer ?
6. Whether the provision of canteen services to all the employees without charging any amount (free of cost) will fall under para 1 of schedule III of GST Act and will nut he subjected to GST?
7. If reply to Q. VI is yes, whether in view of the explanation to Section 17(3) of GST Act, ITC shall be available to the applicant on the goods and services used in the activity of provision of free canteen services to the employees?
Held that— In respect of question no. 1, it is held that GST is applicable on payment of notice pay by an employee to applicant employer in lieu of notice period under clause 5 (e) of Schedule II of CGST Act.
In respect of question no. 2, it is held that the premium of Group Medical Insurance Policy recovered by applicant from the non-dependent parents of employees & retired employees will fall within the ambit of supply and is liable to GST.
In respect of question no. 3, it is held that as per Section 15(1) of GST Act, the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply where the supplier and the recipient of the supply are not related, and the price is the sole consideration for the supply.
In respect to question no. 4, it is held that the applicant-company is liable to pay GST on the amount recovered from its employees towards telephone charges at actuals.
In respect of question no. 5, it is held that the applicant shall be eligible to claim Input Tax Credit in respect of premium paid to insurance company to the extent of its further supply. The Applicant shall not be eligible for the ITC on in respect of canteen services. In respect of telephone charges paid to BSNL, the applicant shall be eligible to claim Input Tax Credit, as telephone charges are not covered by the provisions of Section 17 relating to blocked credit.
In respect of question number 6 canteen services provided to the employees are to be treated as supply, even if there is no consideration. It will be liable to tax as per value determined in accordance with Rule 28.
In respect of question number 7, the reply to this question is already duly covered by reply to question number 5.