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CASH GIFT TO EMPLOYEE

20 January 2018

Being cash not a good, gift above 50,000 to employee need to be taxed for GST, but at what rate and isn't it a contradiction in law?

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3 Replies

CA VISHAL JAIN (Chartered Accountant) (88 Points)
Replied 22 January 2018

Mr. Dushyant as per GST Act cash in neither goods nor service so gift to employee in cash mode is not a supply. You can gift your employee in cash even more than 50000 without paying GST. Gift other than cash and securities which is more than 50000 shall be chargable to tax with the same rate as applicable on such goods or service provided to employee free of cost.

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Dushyant Garg (48 Points)
Replied 22 January 2018

Can you provide me this statement in reference to a section, in regard to such exemption

CA VISHAL JAIN (Chartered Accountant) (88 Points)
Replied 22 January 2018

Dear Dushyant
As per Sec. 2(52) Good means any movable property other than "money" and securities.

As per Sec 2(102) Service means anything other than goods, "money" and securities.

As per Sec. 7 of CGST Act supply menas t/f, barter, exchange etc of goods or service or both and charge of GST (Sec. 9) attracts only on the supply of goods or service or both. So basically intention of law is clear to charge the gst only on supply of goods or service or both but if any thing which is neither goods or nor service the question of charge of gst can't be arise. Hence gift to employee in cash is not a supply and no gst will be charged.