Ministry of Finance clarification on taxation of gifts and perquisites supplied by companies to their employees
Ministry of Finance has via the attached press release clarified that Gifts up to a value of Rs 50,000/- per year by an employer to his employee are outside the ambit of GST. However, gifts of value more than Rs 50,000/- made without consideration are subject to GST, when made in the course or furtherance of business. The press note further explains the term “gift” and elaborates on conditions for perquisites not to be considered as taxable supply under GST. However, applicability of GST on reimbursement under GST from employer to employee continues to be unaddressed in the press note.