No GST on annual gifts worth Rs 50,000 from an employer to an employee, says Finance Ministry
The ministry said this applies to items given voluntarily by the company, not to those over which workers have a right.
The Finance Ministry on Monday dispelled reports that gifts worth Rs 50,000 from employers to employees would come under the purview of the Goods and Services Tax. The ministry said gifts of that value, given within a single year, will not be taxed.
However, gifts made beyond Rs 50,000 “without consideration are subject to GST, when made in the course or furtherance of business,” the ministry statement. The ministry added that while the GST Act does not specify what constitutes a gift, in common understanding, a gift is something that is given voluntarily and an employee cannot demand rights to it. Experts told The Times of India that this in effect applies to office goods that a company allows an employee to use privately.
The ministry also said that services provided to employees will not be taxed.
