It is to apprise you that the Kerala High Court (‘HC’) in the case of Manappuram Finance Limited v. JC (Appeals), TS-648-HC(KER)-2022-GST, has allowed refund of GST paid on notice pay recovery.
Facts of the case
· The taxpayer paid GST on notice pay recovery made from the departing employees.
· The Central Board of Indirect Taxes and Customs (‘CBIC’) vide Circular No. 178/10/2022-GST dated August 3, 2022, clarified that GST is not payable on notice pay recovery.
· The taxpayer, therefore, claimed back the GST earlier paid on such notice pay recovery.
· The Department as well as the Appellate Authority rejected the refund claim.
Source Gaba & Co
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