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Leaving your job without serving notice period? Be ready to pay 18% GST

There is an important update for salaried employees who are planning to leave their jobs without serving the stipulated notice period. 

India TV News Desk Reported by: India TV News Desk New Delhi Published on: January 14, 2021 13:23 IST
18% GST on non-completion of notice period
Image Source : PTI

18% GST on non-completion of notice period

There is an important update for salaried employees who are planning to leave their jobs without serving the stipulated notice period. As per the new rules, employees will have to pay 18 percent of goods and services (GST) tax on the pay recovered for the notice period duration.

According to the Gujarat Authority of Advance Ruling, the employee leaving the company without completing the notice period will have to pay 18% GST along with paying the salary amount to the company for the remaining period.

This rule came during a case hearing held by the authority in which an employee of an Ahmedabad-based company Amneal Pharmaceuticals demanded an advance ruling. The employee had demanded that he wanted to leave the job without completing the three-month notice period.

While hearing the case, the authority decided that the outgoing employee will either have to serve the notice period mentioned in the appointment letter or will have to pay an additional 18 percent GST along with paying the salary amount to the company for the remaining period.

Any company or organisation mentions a notice period in the employee's appointment letter, that varies according to the company's requirement and position so that the company can arrange for his replacement. Therefore before leaving the company, any employee has to work for that notice period. If he/she is unable to serve the notice period or works less than the mentioned period in the appointment letter, he/she will be liable to pay for the remaining days or period. 

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