No need to pay GST amount on the amount of service bond. It is just a compensation for not fulfilling the bond terms and conditions. As there is no supply of services involved therefore no need to pay GST and also this payment is against the employment contract.
GST Applicability on Service Bond
Sir/ Madam, I am a banker and I was working with one of the public sector banks earlier. When I joined the bank we had to execute a service bond of a specific amount in case if I was to resign before a period of 3 years. At the time of joining and execution of bond, GST did not came into effect. Also as per bond agreement it is nowhere mentioned that any type of tax will be applicable on the amount of service bond. Since I left the organisation before period of 3 years I have deposited the bond amount as mentioned in the agreement. Now, my employer wants me to deposit GST at the rate of 18% additionally on the amount of service bond (which is not mentioned in the agreement anywhere). Kindly guide me whether GST is to be paid on the amount of service bond. Thankyou
Asked 7 years ago in GST
No, you are not liable to pay GST in the service bond amount.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
There is no need for you to pay GST on the amount of the service bond.
Regards,
Nikhil.
No gst applicable on service bond amount.
Hi
Since such payment is part of the contract of an employer employee relationship, no GST shall be applicable on it.
I assume that the query has already been resolved by my fellow colleagues. Please feel free to get back in case any part of it has been left unattended/ unresolved.
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