Job hoppers may have to pay Goods and Services Tax (GST) if they do not serve the notice interval talked about of their supply letter at the time of recruitment. The Authority of Advance Ruling (AAR) at GST has stated in its latest ruling that GST could be levied on numerous recoveries from the worker for not serving the notice interval. These recoveries embody pay throughout notice, group insurance coverage, phone invoice, and many others. In brief, an worker will likely be liable to pay GST on its month-to-month wage for not serving the notice interval.
Speaking on the GST levied on the worker for not serving the notice interval, Mumbai-based tax and funding skilled Balwant Jain stated, “As per recent ruling of AAR, it is responsibility of the recruiters to pay GST through reverse charge mechanism on the recoveries from the employee during notice period. As recruiters are in dictating terms, they can ask the job hopper to pay the GST as the employee is not serving the notice period.”
Elaborating upon the GST expenses on one’s notice pay; SEBI registered tax and funding skilled Jitendra Solanki stated, “The recoveries from the employee during notice period include bills like group insurance, mobile bill, etc. In fact, it can be on the entire salary of the employee during the notice pay as well. The employer can charge 18 per cent GST on the total recoveries accruing on the employee leaving the organisation without serving the notice period.”
The SEBI registered skilled went on to add that 18 per cent GST could be levied solely when the worker has not served the notice interval. Otherwise, it is employer who will pay the GST on the month-to-month wage of the worker. He additionally stated that notice interval is talked about in the supply letter and it ranges from one month to even 3 months. So, an worker is suggested to not simply have a look at the wage break up whereas accepting the supply of its new recruiter however notice interval as nicely.
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