GST on recovery of Notice Pay from employees- No Ruling by AAAR due to difference of Opinion

In re Amneal Pharmaceuticals Pvt. Ltd. (GST AAAR Gujarat)

Question: Whether the applicant is liable to pay GST on recovery of Notice Pay from the employees who are leaving the company without completing the notice period as specified in the Appointment Letter issued as per the contract entered between Employer and the Employee?”

Answer:

AAAR Member Ms. SEEMA ARORA held that Amneal Pharmaceuticals Private Limited is liable to pay Goods and Services Tax at applicable rate on the amount of notice pay (liquidated damages) received from the employees leaving the job of the appellant without completing the notice period as specified in the contract entered into (Appointment Letter) between the appellant and its employees, and reject the appeal filed by M/s. Amneal Pharmaceuticals Private Limited.

AAAR Member Shri. MILIND TORAWANE held that the appellant is not liable to pay Goods and Services Tax on recovery of notice pay from employees who leave the company without completing the notice period as specified in the Appointment Letter issued as per the contract entered between employer and employees.

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