Gst on notice pay recovery

Notice pay recovery by the employer shall be considered as a supply of services as it falls under the entry of "agreeing to the obligation to refrain from an Act or situation or to do an Act" specified under schedule II.

Further in your case employer has received the consideration by way of reducing the EL available to the employee. Further, consideration, as defined under section 2(31) of CGST says consideration means any payment made with regards to supply whether in money or otherwise hence non-monetary consideration is also included. 

Thus in my view, GST shall be applicable.

Is GST applicable for the notice period amount for the Resignation made in Dec 2016? The employer send the notice amount payment request only recently in Feb 2018 and is asking to pay 18% GST on the same! Is this correct?

AS per Schedule III of the Central GST Act, 2017, services by an employee to the employer in the course of or in relation to his employment will not be treated as supply of goods or services. Thus, the salaries and other allowances that are paid by the employer to the employee, as part of the employment contract are outside the purview of GST. cont....