In re Fidelity Information Services India Private Limited (GST AAR Karnataka)
In a recent ruling, the GST AAR Karnataka addressed crucial questions regarding the taxation of various employee benefits such as joining bonus, retention bonus, and work from home (WFH) allowances. Fidelity Information Services India Private Limited sought clarity on whether GST applies to the recovery of these bonuses and allowances if employees exit before serving a pre-agreed period.
i. The Company recovers joining bonus and retention bonus on account of employee’s inability to serve the organization (or a particular department, in case of retention bonus) for a pre-agreed period. The applicant wishes to seek clarity whether GST would be applicable on recovery of such bonus?
GST is not applicable on recovery of joining bonus and retention bonus on account of employee’s inability to serve the organization (or a particular department, in case of retention bonus) for a pre-agreed period.
ii. Whether GST would be applicable on recovery of work from home one-time setup allowance paid to employees in case where the employees exit before serving the pre-defined period from the payout date?
GST is not applicable on recovery of work from home one-time setup allowance paid to employees in case where the employees exit before serving the pre-defined period from the payout date.
