Payment of Service Tax on Notice pay recovery by employer.

As per letter of appointment, employees has to serve three (3) month notice period incase of resignation but if they do not serve entire three (3) months period, then the employer company deduct as “notice pay recovery” equal to three (3) months basic salary or basic salary for balance period from full and final settlement of employee.

Query :
1) Whether employer company need to pay service tax on notice pay recovery ?
2) Whether the notice pay amount so recovered will be treated as including Service Tax or Excluding Service Tax ?
3) Whether the employer company need to raise an Invoice to resigned employee ?
4) Under which head the employer company should deposit Service Tax?
5) Under which category the service should be incorporated in Service Tax Registration Certificate ?

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