The AAR ruled that nominal deductions from employee salaries for ...

Employers Must Pay GST on Nominal Salary Deductions for Canteen and Transport Services Under Specific Conditions

April 21, 2025

Case Laws GST AAR

The AAR ruled that nominal deductions from employee salaries for canteen and transportation services constitute a "supply of service" under GST. The authority determined that the recovered amounts are taxable, while the employer's perquisite portion remains non-taxable. For canteen services, input tax credit (ITC) is not available, and GST applies to the employee-recovered amount. In the case of non-air-conditioned bus transportation, GST is applicable on the nominal deduction, and ITC can be claimed from the transport service provider. The decision hinges on distinguishing between employer-provided benefits and taxable service recoveries, ultimately establishing a nuanced approach to GST treatment of employee welfare services.

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The AAR ruled that nominal deductions from employee salaries for ...

Employers Must Pay GST on Nominal Salary Deductions for Canteen and Transport Services Under Specific Conditions

April 21, 2025

Case Laws GST AAR

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