Gifts from the employers - GST provisions

[CSSwati Rawat]

Govt says gifts of up to ₹ 50,000 by employer exempt under GST

On Monday governmnt clarified that gifts worth up to ₹ 50,000 by an employer to its employees as well as free membership of clubs, health and fitness centres will not attract goods and services tax (GST). Also, the services by an employee to the employer in the course of or in relation to his employment is outside the scope of the new indirect tax regime, it said.

Any club, health and fitness centre membership provided by an employer to its all employees free of charge will not be subject to GST. The same would hold true for free housing as part of costtocompany package.

Also the finance ministry  said gifts of up to ₹ 50,000 in a year by an employer to his employee are outside the ambit of GST. "However, gifts of more than ₹ 50,000 made without consideration are subject to GST, when made in the course or furtherance of business," the ministry said. While the GST law does not define gifts, the ministry said for tax purposes gift is something that is made without consideration, is voluntary in nature and is made occasionally.

Discussions to this article

[Sanndeep Kumar]

₹ 50,000/- in a Year? and is there any exemption of gifts given on Festivals ?

[CS Swati Dodhi]

Yes ₹50,000/- for a year. Gifts will include gifts given on festivals adhering to maximum limit prescribed i.e. ₹50,000/-.

[sanjeev goel]

Only gifts from employer upto ₹ 50,000/- are out of GST or the gifts from anybody like free samples etc.??

[CS Swati Dodhi]

As per my understanding it's only gifts from employers.

[Abhishek Jain]

Dear madam,

Is it 50,000 per employee or 50,000 on all employees together.

[sanjeev goel]

Sir it is 50,000/- per employee.

[pradeep kataria]

Dear CS Swati

What would be the treatment where the employer provides services to its empoyees on concessional basis e.g. providing vehicle on concessional rent basis for private use etc. ? Whether it falls under Schedule I or clause 4 of Schedule II.

Since all perquisites provided by the employer to employee are part of CTC and hence is n't it out of GST purview as services provided by employee to employer is outside the purview of GST and hence payment of services provided by employee to employer should also be outside GST purview.

Please advice.

thanks

CA.Pradeep Kataria