Changing jobs without notice? Your entire salary may be subject to 18% GST.

Industries, especially information and technology, are currently experiencing significant attrition as organisations look for new personnel to work on new initiatives. In the race to fill vacancies, hiring employers are even purchasing new employees' notice periods. If you are one of these workers who is departing your current job without giving the appropriate notice time as stated in your offer letter, be prepared to pay 18% GST on the whole notice money (amount paid to your company for not serving the notice period). The Central Board of Indirect Taxes and Customs' Authority of Advance Ruling (AAR) recently made a decision in the case of Bharat Oman Refineries, a subsidiary of state-owned Bharat Petroleum. In this case, GST will be charged on different employees' recoveries, and it will be based on the amount of money that they get back. In addition, companies pay the phone bills of their employees. They also pay for group insurance for their employees, and they pay salaries in part or in full notice period. Since the company is "providing a service" to an employee when it pays them notice pay so GST should be charged on that service. A tax is charged on any activity that is seen as a service, whether it is done directly or if it is thought to be done. Some of the tax experts think that the Authority of Advance Ruling (AAR) doesn't show the right way that the law works.

Changing jobs without notice? Your entire salary may be subject to 18% GST.