Page 20 - Chapter 2.cdr

18. Section 7 (2)- Activities/transactions which shall be treated neither return of the incentive given to them shall not be treated as a “supply”.
as a supply of goods nor a supply of services read with schedule III In the light of above discussion, GST is not leviable on the incentive paid by Angad
CH 2 CCP 02.18.45.00 (Para 1) Private Ltd. to employees.
Employer provides bus service, meal coupon, telephone at residence, gives vehicle
Charge of Tax & Concept of Supply
for official and personal use, uniform and shoes, to employee. Explain implication CCP 02.18.47.00 (Para 2)
of GST? Mr. Raj purchase goods from M/s XYZ Ltd. The goods received by Mr. Raj is not as

Answer: As per Sec 7(2) of CGST Act read with Sch III any service provided by an per his specification given by him to M/s XYZ Ltd. Mr. Raj files a complaint in
employee to employer in the course of or in relation to employment then it is not customer disputes redressal commission and pays fee of ` 2000 for registration
called as supply. of his complaint. Explain whether GST leviable on the fee charged for
Also as per Schedule I para 2 any gift given by the employer to an employee upto `, registration of complaint?

50,000 in a financial year does not qualify as a supply. Answer:- Legal Provision:- As per sec 7 of CGST act read with schedule III of
In given case bus, service, meal coupon etc are provided by the employer in course of CGST Act, Services by any court or Tribunal established under any law for the time
or in relation to employment then no GST is payable, But if it is provided as a gift & being in force is neither a supply of goods nor services
not as a part of employment then GST is payable for any value in exceeding of `, Clarification:-As per circular no. 32/06/2018 GST dt 12/02/2018 Consumer Disputes
50,000 in a financial year. Redressal Commissions (National/ State/ District) may not be tribunals literally as

they may not have been set up directly under Article 323B of the Constitution.
CCP 02.18.46.00 (Para 1) However, they are clothed with the characteristics of a tribunal.
Angad Private Ltd. is engaged in the business of distribution of construction
In view of the aforesaid, it is hereby clarified that fee paid by Mr. Raj in the Consumer
material. As an incentive, Angad Private Ltd. pays an amount of ` 75,000 to its
Disputes Redressal Commissions are not leviable to GST. Any penalty imposed by or
employees upon achieving a specified sales target. The incentive is part of the
amount paid to these Commissions will also not attract GST.
salary of the employees and applicable tax is deducted at source as per relevant
income tax provisions. Angad Private Ltd. is of the view that GST is not leviable CCP 02.18.48.00 (Para 4)
on such incentive paid to the employees. Whether the view taken by Angad Determine whether the following activities fall under the purview of supply as
Private Ltd. is correct? [ICAI Material] per section 7 of CGST Act, 2017:-

Answer- Yes, Angad Private Ltd.’s view is correct. In terms of section 7(2) read i) Mr Raj hires an ambulance for transport facility of a deceased person for
with Schedule III of the CGST Act, services by an employee to employer in the course performing funeral rituals
of or in relation to his employment shall not be treated as supply under GST. Further, ii) Mr S enters into an agreement for sale of land to Mr R for a consideration
the amount paid as incentive by Angad Private Ltd. is not in the nature of gift, and iii) M/s ABC developers sold fully furnished building to Mr. Sagar for a valuable
thus, is not covered under Schedule I of the CGST Act. consideration
In fact, in the given case, the incentive is part of the salary and isdirectly Answer: I) As per section 7 read with Schedule III para 4 of CGST Act, Services of

linked to the sales target. Therefore, the services provided by the employees in
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