9911796707
TMI Blog2020 (11) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 7 and therefore, cannot be subjected to levy of GST. The employee opting to resign by paying amount equivalent to one month's salary in lieu of notice has acted in accordance with the contract. The employee is free to tender his resignation, make payment of one-month salary and quit. Hence, there is neither any active nor any passive role played by the employee. The same is nothing but transactions pertaining to services by employee to the employer in the course of or in relation to the employment. As the activities or transactions in question do not satisfy the test of supply under Section 7 of the CGST Act, 2017, levy under Section 9 is not attracted here. - STC/AAR/10/2020 - - - Dated:- 17-11-2020 - SMT. SONAL K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CL Learning Ltd. V/s Commissioner of CGST Noida - CESTAT ALLAHABAD. 3.2 that :-As per Sec 7(1) , Sec 7(1)(a) GST is leviable on supply of goods or services or both. Supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Comment : The said transaction between employer and employee not fall in any of the above categories, further the transaction are not in the course or furtherance of business, Hence it does not fall under the definition of Supply. Sec 7(2)(a) Notwithstanding anything contained in Sec 7(1) (a) Activities or transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisgarh GST Act, 2017 [hereinafter referred to as the CGST Act and the CGGST Act ] are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 5.2 The applicant sough; advance ruling to the points which could be discussed as under:- a. Any amount recovered/forfeited from employees who are leaving the services without serving notice period/ resigning during probation period is the consideration received when an employee resigns without notice and puts an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forms of supply. The expression such as indicates the character of the transactions. d. In the impugned case, the amount recovered/forfeited from employees who are leaving the services without serving notice period/ resigning during probation period does not fit into the scope of supply under clause (a) of sub-Section (1) of Section 7. Furthermore, the CGST {Amendment) Act, 2018 dated 30-08-2018 inserted sub-Section (1A) to Section 7 of the CGST Act, 2017 with retrospective effect 01-07-2017 in place of clause {d) of sub-Section (1) of Section 7, which seeks to levy tax on certain declared supply of goods or services referred to in Schedule II of the CGST Act, 2017. Thus SCHEDULE II specifies the activities or transactions which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of goods nor a supply of services. SCHEDULE III [See Section 7] ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 1. Services by an employee to the employer in the course of or in relation to his employment. 2. Services by any court or Tribunal established under any law for the time being in force. 3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities; (b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (c) the duties performed by any person as a Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyer in the course of or in relation to his employment as stipulated vide clause 1 of Schedule III supra, the conditions of Section 7 of CGST Act, 2017 is not satisfied and accordingly the transaction in question cannot be termed as a supply within the meaning of Section 7 and therefore, cannot be subjected to levy of GST. The employee opting to resign by paying amount equivalent to one month's salary in lieu of notice has acted in accordance with the contract. The employee is free to tender his resignation, make payment of one-month salary and quit. Hence, there is neither any active nor any passive role played by the employee. The same is nothing but transactions pertaining to services by employee to the employer in the course of o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
