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This article is more than 2 year old.

CXOs may have to pay GST on their fat paychecks, says report

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The tax department, the report said, requires firms in the country to proportionately distribute common costs and treat them as part of the supply chain.

CXOs may have to pay GST on their fat paychecks, says report
The Income Tax Department has started probing whether companies and banks are passing common costs like salaries of chief executives to their branches, reported The Economic Times.
The tax department, the report said, requires firms in the country to proportionately distribute common costs and treat them as part of the supply chain. Once this is done, the report added, 10 percent of the cost incurred on this should be added to the existing total expense. This, the report said, in turn, will enable to bring supply costs into the total taxable amount under the GST.
Top firms based in cities like Mumbai, Pune and Delhi have already started receiving queries from the tax department, the report said. The new steps will also help to strengthen the GST system as it makes clear that all services including common functions are free and are taxable.
“The interpretation adopted by the tax authorities is that an employee of an organisation should be considered as an employee of a particular office only (not the organisation as a whole) for GST-related purposes. Such an interpretation is legally and factually incorrect,” Rohit Jain, partner with law firm ELP was quoted as saying in the report.
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