since the gst amendment act omitted clause (d) of sec 7(1) with effect from date of the original act, whether compensation received for withdrawing from a tender and
receipt of notice pay from employees will be subject to levy of GST?
if yes, under which clause of sec7(1) will it fall?
Yes to remove anomalies ,section 7(1)(d ) earlier the activities constitute supply the activities enumerated in schedule 2 which do not even fall under ambit of supply .
But as per Amendment Act new clause in Sub-section (1A ) inserted , the transaction constitute supply in schedule 2 will be accordance with provision of sub section (1) of Section 7
Notice Pay Recovery may not fall under the definition of supply , but as per Para 5(e) of schedule 2, "Agreeing to the obligation to refrain from an Act ,or to Tolerate an act or situation, or to do act". at the same time if read para 1 of schedule 3 it's not supply (Services by Employees to Employer) but as the Employee has resigned so it no more construe to be as regard to employment . Hence the Tax Officer can demand GST on Notice pay recovery.
Compensation Reced for withdrawing from a tender fall under schedule 2 again " activities of agreeing to the obligation ,to refrain from act " can be constituted as supply , the compensation Reced is treated as consideration so in my view it's an supply & GST is applicable.
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