New Delhi, April 17: The introduction of goods and services tax (GST) has been a source of great confusion ever since the time it got implemented. Now according to reports, India Inc may soon have to start restructuring compensation packages or human resource benefits of their employees, as there is speculation that employee reimbursements will start attracting GST.

According to a report on Business Today, the Authority of Advance Ruling (AAR) in Kerala has given a ruling to levy GST on the amount charged by employers for canteen food given to employees. On a plea made by Caltech Polymers Pvt. Ltd, the Authority was asked to clarify whether recovery of food expenses from employees for the canteen provided by company comes under the definition of outward supplies and if it would be taxable under the GST Act. The Authority ruled that it came under outward supplies and should be brought under the ambit of GST.

According to the report, the ruling said: "Even though there is no profit as claimed by the applicant on the supply of food to its employees, there is 'supply' as provided in Section 7(1 )(a) of the GST Act, 2017. The applicant would definitely come under the definition of 'Supplier' as provided in sub-section (105) of Section 2 of the GST Act, 2017."

Though the AAR ruling is case specific, reportedly, reimbursements on home rentals, telephone charges beyond a certain limit, medical premiums for extra coverage, health check-ups, transportation, gym use, uniforms or even re-issue of identity cards could face GST.

GST was rolled out on July 1 last year, replacing multiple state and central taxes such as excise duty, service taxes, value added tax and entry tax.

(The above story first appeared on LatestLY on Apr 17, 2018 09:11 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).