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Gst on car given to legal heir of deceased employee

Dinesh Panchal (business) (51 Points)

30 March 2018

One of our private limited company's employee whose being director, was demised last month, and company owner has decided to give company car to his wife(legal heif of deceased employee), so there is leavy of GST at the time of given/transfer car ? if GST applicable then provide in details. please help

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5 Replies

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 30 March 2018

Yes , off course GST is applicable

Dinesh Panchal (business) (51 Points)
Replied 31 March 2018

Can you explain in details ? which value will be considered for GST?

Nirav Worah (CHARTERED ACCOUNTANT) (396 Points)
Replied 31 March 2018

Under GST law, employer and employee are considered to be related. Hence, in case of related party, the value would be determined as per the valuation rules provided under the CGST Rules.

However, it could be argued in the instant case that the payment is not made to the employee on account of following reasons:

1. After the death of the employee, the employment agreement terminates

2. Car is given to the employee's wife who is not a related party under the GST law.

Therefore, in absence of any consideration, it could be agrued that no GST should be payable in the instant case.

Please feel free to connect, if you require any further clarification.

Regards,

Nirav Worah

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