HR needs to rethink and bring in new guidelines to create a win-win situation for both the employee and the employer by accommodating the new changes prescribed under GST
The Goods and Service tax is one of the biggest fiscal reforms in India since Independence with the objective to streamline India’s complicated indirect taxation. But change is definitely never easy. While every small or large business entity is busy in complying with the new GST regime, HR professionals are also engaged in discussions to assess the effects of GST on employer-employee transactions under various categories.
Here are some of the elements that HR will have to consider while implementing this unified tax system in organizations.
Gifts to employees
Every employer under different programs distributes gifts to their employees. In India, festivals incur a huge show of gifts for workforce in most organizations. Even during off sites, gifting merchandise is common. Occasions like birthdays, work anniversaries, farewells etc. of employees are also celebrated by organizations and gifts are provided in the form of cash rewards or vouchers.
GST will be applicable if the value of gifts increases INR 50,000 in a financial year. If the value of all gifts in the year is more than INR 50,000 then GST will be applicable on the amount above INR 50,000. However, if the amount of a single gift is more than INR 50,000, then GST will be applicable on the total amount of the single gift.
The HR now will have to start planning and tracking gifts provided to employees in the financial year to ascertain the applicability of GST.
This story is from the People Matters - August 2017 edition of People Matters.
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This story is from the People Matters - August 2017 edition of People Matters.
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