The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular addressing various issues including the refund claimed by the recipients of supplies regarded as deemed export, interpretation of section 17(5) of the CGST Act, perquisites provided by employer to the employees as per contractual agreement, and the utilisation of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities.
The circular stated that the ITC availed by the recipient of deemed export supplies would not be subjected to provisions of Section 17 of the CGST Act, 2017.
It was further clarified that the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the whole of clause (b) of sub-section (5) of section 17 of the CGST Act.
Further, “leasing” referred in sub-clause (i) of clause (b) of sub-section (5) of section 17 refers to leasing of motor vehicles, vessels and aircrafts only and not to leasing of any other items. Accordingly, availment of ITC is not barred under sub-clause (i) of clause (b) of sub-section (5) of section 17 of the CGST Act in case of leasing, other than leasing of motor vehicles, vessels and aircrafts.
Regarding the perquisites, the Board has clarified that any perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are in lieu of the services provided by employee to the employer in relation to his employment. It follows therefrom that perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee.
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