Non-compete amount given to outgoing employee may draw GST

Non-compete amount given by an employer to its outgoing employee may attract goods and services tax (GST), even as exact clarity will emerge once rules are cleared by the GST Council on March 31. 

Even now, this amount attracts service tax, explains M S Mani of Deloitte. 

As such, any amount given by an employer which is not part of the contract may attract GST, he said.

He, however, cautioned that GST Bills should not be read in isolation of the rules which are yet to be framed. 

Which items will attract tax will be contingent on these rules and