A wide range of benefits such as free beverages, canteen facilities, free parking space, journal subscriptions or even group medical insurance provided by business entities to its employees in terms of a contractual agreement between the two, will not be subject to Goods and Services Tax (GST).

 

The Board has also clarified that GST payable as a result of departmental audits and assessments can be made using GST credits, instead of making cash payments, a move that will help several businesses having accumulated tax credits.

 

There are a slew of litigations surrounding GST applicability over perquisites offered to employees and the divergent advance rulings on the subject led to confusion. A perquisite is a non-cash benefit granted by an employer to the employee such as transportation, canteen, healthcare, insurance, for their employees.