GST on Notice Pay Recovery

Is GST applicable on Notice pay recovery. (Amount recovered from employee by employer).If yes, pls share the Section no. Rule no. and SAC number.
Replies (4)
Quick Summary
This discussion explores whether Goods and Services Tax (GST) is applicable when an employer recovers notice pay from an employee. While one perspective suggests it's a supply of service under Schedule II, as the employer tolerates a breach of contract, another argues that the employer-employee relationship and lack of 'supply' exempt it. The consensus leans towards GST not being applicable, particularly when the employment contract has ceased, as it falls under Schedule III.

Yes GST is applicable.

As per para 5(e) of Schedule II , 'tolerate an act or situation" shall be treated as supply of services .
So here the employer has tolerated a breach of Contract by employee.
Thankyou Sir, Can you please provide the SAC number?
As per my view, GST will not be applicable. Bcz:-
1. There is employer employee relationship.
2. There is no supply.

Lets see what other experts say.

@ CA SUNNY AGGARWAL

IT DOES NOT COVER UNDER EMPLOYER EMPLOYEE RELATIONSHIP ANYMORE BECAUSE HERE THE  CONTRACT HAS BEEN CEASED.ITS NOT BEING IN COURSE OF OR RELATION TO EMPLOYMENT.

YES "NOTICE PAY BY EMPLOYER" IS COVER UNDER SCHDULE III HENCE GST DOES NOT ATTRACT

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