Perquisites paid to contract consultant

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This discussion clarifies how perquisites like housing and vehicles provided to contract consultants are treated for both the consultant and the client. It addresses the Goods and Services Tax (GST) implications, specifically referencing Circular No. 172/04/2022-GST, which exempts employer-provided perks to employees but not those provided in a consultant-client relationship. Income tax on such perks is also considered.

Ashok Kumar T T

Ashok Kumar T T (Querist)
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28 October 2022 I would like to know how the perquisite viz; Housing Vehicle should be treated by the consultant who is the recipient, in as much as by the Client the paymaster. Ramifications of GST too preferably, as to whether the contract of the consultant falls under Circular 172 of GST.
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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 October 2022 Income tax applicable on such perks.

Any perquisites provided by the employer to its employees in respect of contractual agreement between them would not be subjected to GST this has been clarified vide Circular No. 172/04/2022-GST dated 6th July 2022.