New Delhi: The gifts received by an employee from his or her company upto Rs 50,000 per year will not attract any GST, finance ministry clarified on Monday.
Also giving membership of clubs, health, fitness centres and housing facility to employees will not attract the GST.
It said that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of the new indirect tax regime.
However, gifts of value more than Rs 50,000 made without consideration are subject to GST, when made in the course or furtherance of business.
“It’s being reported that gifts and perquisites supplied by companies to their employees will be taxed under GST. Gifts upto a value of Rs 50,000 per year by an employer to his employee are outside the ambit of GST,” said the ministry.
The ministry said that the question arises as to what constitutes a gift.
“Gift has not been defined in the GST law. In common parlance, gift is made without consideration, is voluntary in nature and is made 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,” it said.
“It is pertinent to point out here that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods or supply of services),” said the ministry.
