No service tax payable on amount of notice pay recovered from employer in lieu of sudden termination of employees
Last updated: 17 February 2022
Court :
CESTAT, Delhi
Brief :
The CESTAT, Delhi in M/s Rajasthan Rajya VidhyutPrasaran Nigam Ltd. v. Commissioner of CGST, Customs [Service Tax Appeal No. 53020 of 2018 dated January 01, 2022] set aside the order passed by the Revenue Department confirming demand of service tax on the notice pay recovered by the assessee from its employees for premature resignation. Held that, no service tax is payable on notice pay in lieu of sudden termination, as it does not give rise to the rendition of service either by the employer or the employee, and compensation for failure under a contract cannot be consideration for service. Further held that such contract cannot be termed as declared service.
Citation :
Service Tax Appeal No. 53020 of 2018 dated January 01, 2022
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Bimal Jain
Published in Service Tax
Views : 696
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