Leaving Job Without Serving Notice Period Can Attract 18% GST on Recovered Pay

Exiting your job without serving the stipulated notice period will now cost employees 18 percent goods and services (GST) tax on the pay recovered for the notice period duration, according to reports. The Gujarat Authority of Advance Ruling was hearing the case of an employee belonging to Amneal Pharmaceuticals.

January 14, 2021

National

2 min

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New Delhi, January 14: Exiting your job without serving the stipulated notice period will now cost employees 18 percent goods and services (GST) tax on the pay recovered for the notice period duration, according to Economic Times reports.

Leaving Job Without Serving Notice Period Can Attract 18% GST on Recovered Pay

The Gujarat Authority of Advance Ruling was hearing the case of an employee belonging to Amneal Pharmaceuticals. It held that an employee exiting a company without completing a notice period would be liable to pay 18 percent goods and services tax on the recovery of pay for the duration of the notice period. Jet Airways Allows Pilots to Leave Without Serving Notice Period; Premium Flyers Lose T2 Lounge Access at Mumbai Airport.

The authority in its order stated, “We hold that the applicant is liable to pay GST at 18 percent under the entry of services not elsewhere classified, on the recovery of notice pay from the employees who are leaving the company without completing the notice period as specified in the appointment letter issued as per the contract entered between them.”

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