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If you can understand this single line in GST... your employees will go ape

"Clients do not come first. Employees come first. If you take care of your employees, your employees will take care of your clients”... Maverick entrepreneur Richard Branson has subtly put. Over many moons, organisations have been consciously developing various ways to reward their employees... and still, they do... But do you know... in this era of GST... all you need is a mere understanding of this single line of CGST 2016 Sch III clause 1...

And that line is ---

"Services by an employee to the employer in the course of or in relation to his employment are not a supply"

My dear sharp minded HR, FM, Tax pro...

Let me hit the high...

Do you see the underlined words above? Yes, these words are the real pith that would make your employees go ape.... and dance...

If you are HR or tax consultant or from finance team, then just remember only this much...

"that any payment that you make to an employee... yes any payment... whether it is salary, allowance, perquisite, reimbursement... in cash, by cheque or in kind... is GST free... if you can prove that you made it in the course of or in relation to employee's employment..."

And, the first thing that you should rush to do... after reading this ripple... should be...

Pick up your employment contract... read it... re-read it... and then assiduously tittle it a little... to cover all the payments... that you can imagine of... and that doesn't defy logic... in that employment contract. It could be free food... health insurance... Diwali bonuses... travelling allowances... telephone reimbursements... spectacle purchases... old car transfer...whatever... include them in your contract...

Including them in employment contract gives a feeling... ie legally valid... that you as an employer has to provide to the employee in the course of employment...

Now, how should you deal with the payments made that you could not cover in the employment contract?

Simple man, put your incisive brain on work... ask him to check...

... Whether this payment falls with in the realm of the magical line in clause 1 of Schedule III... ie whether the payment has been made in the course of or in relation to his employment or not?

If your sensorium says "Yes", then man... charge (collect) no GST... else charge (collect) GST...

You may say... OK I will collect GST... but how... what is the process?

Then my dear sharp minded... wait for my next ripple...

I will paste the link here < ___________ >

Wishing you a very good luck...

Thanks,

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If you can understand this single line in GST... your employees will go ape

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And that line is ---<h1 class="ql-align-center">"Services by an employee to the employer in the course of or in relation to his employment are not a supply"</h1> My dear sharp minded HR, FM, Tax pro...Let me hit the high...Do you see the underlined words above? Yes, these words are the real pith that would make your employees go ape.... and dance...If you are HR or tax consultant or from finance team, then just remember only this much... "that any payment that you make to an employee... yes any payment... whether it is salary, allowance, perquisite, reimbursement... in cash, by cheque or in kind... is GST free... if you can prove that you made it in the course of or in relation to employee's employment..."And, the first thing that you should rush to do... after reading this ripple... should be... Pick up your employment contract... read it... re-read it... and then assiduously tittle it a little... to cover all the payments... that you can imagine of... and that doesn't defy logic... in that employment contract. It could be free food... health insurance... Diwali bonuses... travelling allowances... telephone reimbursements... spectacle purchases... old car transfer...whatever... include them in your contract...Including them in employment contract gives a feeling... ie legally valid... that you as an employer has to provide to the employee in the course of employment...Now, how should you deal with the payments made that you could not cover in the employment contract?Simple man, put your incisive brain on work... ask him to check... ... Whether this payment falls with in the realm of the magical line in clause 1 of Schedule III... ie whether the payment has been made in the course of or in relation to his employment or not?If your sensorium says "Yes", then man... charge (collect) no GST... else charge (collect) GST...You may say... OK I will collect GST... but how... what is the process?Then my dear sharp minded... wait for my next ripple... I will paste the link here &lt; ___________ &gt; Wishing you a very good luck...Thanks,

And that line is ---<h1 class="ql-align-center">"Services by an employee to the employer in the course of or in relation to his employment are not a supply"</h1> My dear sharp minded HR, FM, Tax pro...Let me hit the high...Do you see the underlined words above? Yes, these words are the real pith that would make your employees go ape.... and dance...If you are HR or tax consultant or from finance team, then just remember only this much... "that any payment that you make to an employee... yes any payment... whether it is salary, allowance, perquisite, reimbursement... in cash, by cheque or in kind... is GST free... if you can prove that you made it in the course of or in relation to employee's employment..."And, the first thing that you should rush to do... after reading this ripple... should be... Pick up your employment contract... read it... re-read it... and then assiduously tittle it a little... to cover all the payments... that you can imagine of... and that doesn't defy logic... in that employment contract. It could be free food... health insurance... Diwali bonuses... travelling allowances... telephone reimbursements... spectacle purchases... old car transfer...whatever... include them in your contract...Including them in employment contract gives a feeling... ie legally valid... that you as an employer has to provide to the employee in the course of employment...Now, how should you deal with the payments made that you could not cover in the employment contract?Simple man, put your incisive brain on work... ask him to check... ... Whether this payment falls with in the realm of the magical line in clause 1 of Schedule III... ie whether the payment has been made in the course of or in relation to his employment or not?If your sensorium says "Yes", then man... charge (collect) no GST... else charge (collect) GST...You may say... OK I will collect GST... but how... what is the process?Then my dear sharp minded... wait for my next ripple... I will paste the link here < ___________ > Wishing you a very good luck...Thanks,

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If you can understand this single line in GST... your employees will go ape

If you can understand this single line in GST... your employees will go ape