Pls find Full & Final Settlement of Account format in attached excel for your reference.
Further I would like to share with you all the applicability of Service Tax on Shortfall of Notice period amount.
Many of us are not aware that there is Service Tax applicability on Shortfall of Notice Period amount recovery, which is payable by the employee himself. I am attaching circular, in this regards for members benefit.
Inorder to help the left employees, it is advisable to adjust the maximum balance unavailed leave against the shortfall of notice period, so as to minimise / reduce his /her service tax liability.
Name of Company:
FULL & FINAL SETTLEMENT
Name of Employee: Arun Bhaskar Surya Date of Joining:
Emp. Code: 1234 Date of Leaving: 31.07.2017
Designation: Purchase Officer: Date of Resignation:01.07.2017
Salary for the Month: Jul-17 Days Paid 31
Earnings Amount in Rs. Deductions Amount in Rs.
Basic Prov. Fund
Dearness Allowance ESI
House Rent Allowance Prof. Tax
Commuting Allowance TDS
Other Allowance Others
Balance Leave Encashment 60 days Shortfall N.P. 76000
Gratuity for __Years
TOTAL 38000 76000
In view of the above settlement I hereby confirm that I owe the sum of Rs. (Rupees: ) to M/s. Towards shortfall of Notice Period
I also hereby confirm that I have no further claims of whatsoever nature against the Company including re-employment and or re-instatement.
Date: Arun Bhaskar Surya
Notice period be out is related to employment and is therefore out of the service net tax the opinion given in your attachment is definitely wrong. There is no need service tax on this amount.
In any case, service tax is not applicable for person having a business turnover of less than 10 lakhs. So even under that rule this employee would not be covered.
Further, please note that service tax is now replaced with GST. Under GST also employee related services are not covered under any tax