GST on Company Cars for Employees: New Ruling

Quick Summary

The Tamil Nadu Appellate Authority for Advance Ruling has confirmed that Goods and Services Tax (GST) is applicable on car facilities provided to employees when the company recovers the lease cost from them. The ruling clarifies that such benefits do not qualify as perquisites under Schedule III of the CGST Act, which exempts certain employer-provided benefits from GST. Therefore, the transaction is subject to GST.

Court :
AAAR, Tamil Nadu

Brief :
The AAAR, Tamil Nadu in the case of M/s Faiveley Transport Rail Technologies India (P.) Ltd., In Re [A.R. Appeal No. 03/2024 AAAR dated July 10, 2024] upheld the ruling passed by AAR Tamil Nadu wherein it was ruled that GST would be applicable on Car facility extended to employees when the amount of car lease incurred by the company is recovered from employees as the said transaction would not be covered under Entry 1 of Schedule III of Central Goods and Services Tax Act ("the CGST Act").

Citation :
A.R. Appeal No. 03/2024 AAAR dated July 10, 2024

Daily Limit Reached