Nal Neer Private Ltd. is engaged in the business of distribution of construction material. As an incentive, Nal Neer Private Ltd. pays an amount of…
CA Final · Indirect Tax Laws · MTP · January 2026
Nal Neer Private Ltd. is engaged in the business of distribution of construction material. As an incentive, Nal Neer Private Ltd. pays an amount of 75,000 to its employees upon achieving a specified sales target. The incentive is part of the salary of the employees and applicable tax is deducted at source as per relevant income tax provisions. Nal Neer Private Ltd. is of the view that GST is not leviable on such incentive paid to the employees. Whether the view taken by Nal Neer Private Ltd. is correct?
Suggested Answer and Working Notes:
Sales target. Therefore, the services provided in course or in relation to employment by the employees for which incentives are given to them shall not be treated as a "supply”. In the light of above discussion, GST is not leviable on the incentive paid by Nal Neer Private Ltd. to its employees.
Topics: Supply Under GST
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