New Delhi: Use of various company’s amenities and assets such as cars, gyms, etc. by employees valued upto Rs 50,000 will not be attracted by GST, clarified by Finance Ministry.
If this is a part of employment program, it will not be subject to GST as it covers the principle that can motivate employee by compensation and salary given to them for utilising the service that is not subject to any tax.
This system is also applicable to employee who uses free housing from employer as a part of contract. There does not exist such limit. But, in the matter of gifts, it is limited Rs 50,000 as these are given voluntarily and are not part of the compensation which an employee can claim as a right.
Finance expert across the country have a fair review on this system. It simply clears that for the benefits of employee, employer can provide such amenities and compensation which does not come under GST radar.
Various compensation like private car, free meals, gymnasium and various such facilities provided are considered as a part of an employment contract.
The finance ministry clarified that although the term gift had not been defined in the GST law, in common parlance, it is voluntary in nature and is given occasionally. “It cannot be demanded as a matter of right by the employee and the employee cannot move a court of law for obtaining a gift,” said the ministry.
Separately, the ministry also clarified that GST on sanitary napkins is a tad lower than what it was earlier. It attracts a 12% GST rate compared to 13.7% tax burden in the earlier system, the official statement said.