Are Employee Perks Like Meals and Transport Taxed Under GST in India? Here's What You Need to Know

Friends,

Please find attached 100 FAQs released by the Government on GST on June 26, 2017, based on queries received on Twitter. Refer to FAQ 68 regarding employees:

Q: The employer provides a bus service, meal coupons, a telephone at the residence, a vehicle for official and personal use, as well as a uniform and shoes. Is GST applicable to these services?

A: If the value of such supplies is considered as gifts, no GST will apply until the total value of these gifts exceeds Rs. 50,000/- in a financial year.

Thank you.

Understanding GST Implications on Employee Perks in India

In response to your query about the GST applicability on various employee perks provided by the employer, the Government has clarified that if the value of these supplies is categorized as gifts, GST will not be applicable until the cumulative value of these gifts surpasses Rs. 50,000 in a financial year. This means that as long as the total value of the bus service, meal coupons, telephone at the residence, vehicle for official and personal use, uniform, and shoes remains below the specified threshold, GST will not be levied on these benefits.

It is crucial for employers to monitor the value of such perks to ensure compliance with the GST regulations. Once the total value exceeds Rs. 50,000 in a financial year, GST will be applicable on the additional value beyond this threshold. Therefore, organizations should maintain accurate records and periodically assess the value of the perks provided to employees to determine the GST implications.

By adhering to the guidelines set forth by the Government regarding the GST treatment of employee perks, employers can effectively manage their tax obligations while offering valuable benefits to their workforce in a compliant manner.