GST to be applicable on fringe benefits availed by employee
As per the latest round of clarification issued by the Central Board of Excise and Customs (CBEC), the new Goods and Services Tax (GST) will be applicable on the non – monetary fringe benefits that employee gets from his employer. However, the monetary compensation will not be considered as supply and will not attract GST but relevant income tax will continue to be levied on monetary income.
CBEC shared with TOI that, in furtherance of business, the fringe benefits form transactions, even without consideration, they are deemed to supply and in any case will attract GST.
The FAQ shared by CBEC, reveals that in case of free replacement (without consideration under warranty) by business to customers, no GST will be levied but in case, any element of service is involved, it will be taxable. Also, FAQ clearly highlights that employee would pay GST on job work charges only labour charges in an invoice would also attract GST.
Other instance where an act would be considered the as supply of service and found taxable include: Penalties levied on delayed payment of loans and advances. The penal interest will act as consideration here.
Equipment and instruments sent to manufacturers' factory for repairs within India on returnable basis would not be counted the as sale.
Integrated-GST (IGST) tax would be applicable on reverse charge basis when recipient of online database use services from a company abroad over the net. If recipient is not registered then OIDAR service provider is liable to pay tax.