Understanding Recruitment Fee Refunds: Should GST and TDS Be Included When a Candidate Leaves Early?

In the event of a candidate leaving the client's company within 90 days of the date of joining, the consultant is liable to provide a replacement within 30 days from the date of the request raised by the company. If the consultant is unable to provide a replacement, then he needs to refund the amount.

My query is, does the consultant only refund the recruitment fee paid by the client excluding the TDS and the GST, or does he need to refund the entire amount back including the TDS and the GST?

Dear Suhan,

In the given circumstance, the consultant will refund the entire amount back to the company in the form of a Credit Note. Upon receiving the Credit Note, the GST input benefit will be reversed, and TDS will also be reversed if it is in the same quarter.

Regards,
Rahul Chhabra