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Anoop Inani (Employee)     26 July 2021

GST on recovery of higher education cost from employee

Hello All,

I have a question on applicability of GST on the below transaction:

Facts - i) Company is a SEZ unit

ii) Company provides an employee higher education programme to senior level employees wherein a specified cost (let's say 20 lakhs) of the course will be sponsored by the company.

Any cost over and above 20 lakhs will need to be borne by employee

iii) A employee opts for a course of value 30 lakhs

iv) The institute normally charges GST on such course, however, considering that the invoice for course will be billed directly to company, being a SEZ unit, it is ready to provide GST exemption on 30 lakhs after executing a LUT (Letter of undertaking)

v) The Company will pay 30 lakhs to institute and recover 10 lakhs from employee (employee to pay that amount through bank transfer)


i) Is GST chargeable on 10 lakhs recovered from employee

ii) If yes, what is the value on which GST to be charged - 10 lakhs or 30 lakhs

iii) Any possible model wherein we recover the cost of 10 lakhs without triggering GST implication.

Any leads to above questions will be highly appreciated


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