Input credit of RCM -GST paid on notice pay recovery

This query is : Resolved

Sonnal Khandaray (Querist)
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25 April 2022 Hi All

Whether employer can claim ITC on GST paid on RCM basis on notice pay recovery?

Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 April 2022 No need to pay GST under RCM.
Court rulings are there GST not applicable on such recovery. Amend GST return.

Order of Commissioner (Appeals) in case of M/s. Gujarat State Fertilizers & Chemical Ltd – It held that cessation of employment is treated as employment service not liable for the GST.

Allahabad CESTAT in case of M/s. HCL Learning Systems Vs CCE, Noida – It held that the amount recovered out of salary already paid is not subject to GST.