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Gifts above Rs 50,000 from employer will attract GST

NEW DELHI: Gifts of more than Rs 50,000 in value by an employer to his employee will attract GST, the Ministry of Finance said on Monday. "Gifts up to a value of Rs 50,000/- per year by an employer to his employee are outside the ambit of GST. However, gifts of value more than Rs 50,000/- made without consideration are subject to GST, when made in course or furtherance of business," Finance Ministry said in a series of tweets. It said services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST. Also supply by an employer to an employee in terms of contractual agreement entered into between employer and employee, will not be subjected to GST. The GST, India’s biggest tax reform since Independence, rolled out on midnight July 1. Ahead of the launch, the GST Council slashed the rate of fertilisers from 12 per cent to 5 per cent and of exclusive parts of tractors from 28 per cent to 18 per cent to reduce the burden on farmers. The launch of GST, which the government claimed would result in reduction of prices of articles of common consumption, also came amidst fears from various business sections that prices would go up under the new regime. The GST is expected to check tax evasion and broaden tax base. In the new regime, all filings will be done only through electronic mode to ensure non-intrusive administration. This will minimise taxpayers’ physical interaction with the tax officials. The GST regime seeks to reduce rates of over 50 per cent of items of daily use and charge others at much lower rate of 5 per cent, 12 per cent and 18 per cent. A higher tax rate is imposed on luxury and sin goods at 28 per cent in the new regime. Certain services like telephone, banking and insurance are expected to feel the pinch of higher taxes. The GST also promises taxpayers a refund against their sales within 60 days. Similarly, exporters will get refund within seven days. For protection of consumer rights, the new law provides anti-profiteering provisions. In a departure from the normal practice, the GST will be administered together by the Centre and the states. (With inputs from IANS)
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