Employees with special reimbursements might be liable to pay GST

Employees getting reimbursements in terms of rents, telephone charges, medical reimbursements for extra coverage, health check-ups and transportation might have to pay GST, says a news report.

According to The Economic Times, tax experts are telling companies to examine these issues closely in the wake of a decision by the Authority for Advance Rulings in a case relating to canteen charges. The authority had ruled that canteen charges recovered from an employee would be liable to GST.

This would result in employers stop charging for the food in a bid to save the tax, but could impact the employee’s salary packages, it quoted an expert.

Earlier this month, the Central Board of Direct Taxes notified the new Income Tax Return (ITR) forms for assessment year 2018-19. The new forms mandate that salaried class assessees provide their salary break-up, while businessmen should provide their GST number and turnover.

Salaried taxpayers have to file the most basic ITR-1, known also as Sahaj; last year, more than 30 million taxpayers filed returns under ITR-1. Only resident Indians having income of up to Rs5 million and who receives income from salary, a house property or other interest income can file under this form.

Individuals and Hindu Undivided Families (HUFs) have income under any head other than business or profession has to file under ITR-2. And those with income under the head business or profession have to file either ITR-3 or ITR-4 in presumptive income cases.

Assessees under ITR-4 will have to furnish their GST registration number and turnover.