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Check sibling questions

Why ITC Not Available of Employee Expenses?

Last updated at Dec. 16, 2024 by Teachoo

Employee benefits are in nature of salary
Since no GST applicable on salary, no GST on this employee benefits also
 

Example 1

Suppose we hire an employee at a salary of 60000 pm

Is any GST applicable on employee salary

Can we take ITC of it?

View answer

No GST applicable on salary

Since no GST, no ITC can be claimed

Example 2

Suppose we reduce employee salary to 40000

and we provide different benefits to employee of 20000 

and we claim ITC of GST on this 20000

Is this allowed

View answer

This is not allowed as this 20000 is in nature of salary

SUMMARY

Transcript

SALARY TO EMPLOYEE 60000 PM Option 1 Option 2 SALARY But no ITC of these Employee Benefit expenses 60000 BASIC SALARY 40000 FREE FOOD 5000 FREE GYM MEMBERSHIP 4000 FREE LIFE INSURANCE 1000 FREE MEDICAL INSURANCE 2000 FREE COMPANY CAB 8000 TOTAL 60000 No Gst on Salary So No Input GST Charged on these expenses teachoo.com
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About the Author

CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.