Page 33 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] TAXABILITY OF NOTICE PAY AS CONSIDERATION — AN ANALYSIS J129
Therefore notice pay recovery is not a separate consideration of an act or
forbearance but an adjustment of salary and hence does not tantamount to any
supply which is leviable to GST.
Conclusion
Thus, the notice period recovery by the employer or premature of notice
period payment in lieu of salary to the employee is not a distinct consideration
but it is only salary on account of resignation by employee and leaving organiza-
tion before completion of notice period as per the appointment letter may not
attracts tax/GST. However, this subject is not free from litigation. Therefore, it is
requested to the GST Council/Government should come out with suitable clari-
fication on the issue to avoid litigation in the coming days.

_______

[Continued from page J125]

(b) As mentioned above, the law maker tries to achieve that there
should not be any disparity between goods and services just be-
cause classification varies. However, the ARR ruling bring forth
such disparity by artificially splitting supply of ‘electricity’ through
Grid and through DG set which is going against the principal of in-
tention of the law.
(c) The ruling also conveniently ignores exemption provided in service
notification viz. ‘Transmission or distribution of electricity by an
electricity transmission or distribution utility’ in Entry No. 25 in No-
tification No. 12/2017-C.T. (Rate), dated 28th June, 2017, and this
exemption can directly be applied for ‘electricity’ transmit-
ted/distributed to the applicant through DG sets.
_______

GST LAW TIMES  26th March 2020  129