TaxTMI 
TaxTMI 
TaxTMI 
| Expenses Under GST Regime | |||||
| Rate of tax under GST on expenses debited to Trading Profit & Loss A/c | |||||
| Sr. No | Nature of Expense | Rate of Tax | Whether registered supplier will levy tax | Reverse Charge(If supply is unregistered) | Whether Eligible for Input Credit |
| 1 | Salaray, wages & bonus paid to employee | 0% | No | No | No |
| 2 | Electricity bill | 0% | No | No | No |
| 3 | Water Charges/ Plain Water | 0% | No | No | No |
| 4 | Bank Interest | 0% | No | No | No |
| 5 | Professional Tax | 0% | No | No | No |
| 6 | BMC Tax | 0% | No | No | No |
| 7 | Building / Property Tax | 0% | No | No | No |
| 8 | Rent Deposits | 0% | No | No | No |
| 9 | Other Deposits | 0% | No | No | No |
| 10 | Petrol / Disel/ CNG/Kerosene Expenses (Motor Spirit) | 0% | No | No | No |
| 11 | Liquor Expenses | 0% | No | No | No |
| 12 | Registration Fees (ROF / ROC / RTO etc) | 0% | No | No | No |
| 13 | Bad Debt | 0% | No | No | No |
| 14 | Donation | 0% | No | No | No |
| 15 | Labour Welfare Contribution to Goverment | 0% | No | No | No |
| 16 | Fine & Penalities | 0% | No | No | No |
| 17 | Conveyance Expense - Non AC Taxi, Auto, Bus, Train | 0% | No | No | No |
| 18 | Loading & Unloading in relation agricultural produce/ Hamali | 0% | No | No | No |
| 19 | Rent Paid for residential use | 0% | No | No | No |
| 20 | Godown Rent for agricultural produce | 0% | No | No | No |
| 21 | News paper & magazines | 0% | No | No | No |
| 22 | Remuneration to Director & partners | 0% | No | No | No |
| 23 | Conveyance Expense - Radio Taxi like OLA & UBER or other AC vechile | 5% | Yes | Yes | No |
| 24 | Payment to Goods Transport Agency | 5% | No | Yes | Yes |
| 25 | Travelling in Train by AC or First class | 5% | Yes | Yes | No |
| 26 | Job Work / Labour Charges for textile yarn & textile fabric | 5% | Yes | Yes | Yes |
| 27 | Job Work / Labour Charges for diamond , jewellery & precious metal | 5% | Yes | Yes | Yes |
| 28 | Job Work / Labour Charges for printing of books, journals & periodicals | 5% | Yes | Yes | Yes |
| 29 | Food & Beverages Expense (Non AC restaurant) | 12% | Yes | Yes | No |
| 30 | Room Rent in a hotel, lodge (Rs.1000 to 2500 per room per day | 12% | Yes | Yes | Yes |
| 31 | Fuel (Furnace Oil/LPG) | 18% | Yes | Yes | Yes |
| 32 | Sales Promotion/Business Promotion | 18% | Yes | Yes | Yes |
| 33 | Food & Beverages Expense (AC restaurant) | 18% | Yes | Yes | No |
| 34 | Mineral water | 18% | Yes | Yes | Yes |
| 35 | Truck/ Tempo Hire Charges | 18% | Yes | Yes | Yes |
| 36 | Club & Membership fees | 18% | Yes | Yes | No |
| 37 | Advertisement Charges / Hoarding / Magazine / News Papers / Media | 18% | Yes | Yes | Yes |
| 38 | AMC Charges | 18% | Yes | Yes | Yes |
| 39 | Bank Charges - Service charges recovered | 18% | Yes | No | Yes |
| 40 | Broker Fee & Charges | 18% | Yes | Yes | Yes |
| 41 | Cancellation Charges | 18% | Yes | Yes | Yes |
| 42 | Extended Warranty | 18% | Yes | Yes | Yes |
| 43 | House Keeping Charges | 18% | Yes | Yes | Yes |
| 44 | Insurance paid on goods & vechile | 18% | Yes | Yes | Yes |
| 45 | Health Insurance | 18% | Yes | No | No |
| 46 | Payment to advocate | 18% | No | Yes | Yes |
| 47 | Loading & Unloading - others/ Hamali | 18% | Yes | Yes | Yes |
| 48 | Training Expense | 18% | Yes | Yes | Yes |
| 49 | Payment to Post office for Speed post & parcel post | 18% | No | Yes | Yes |
| 50 | Postage and Courier Charges | 18% | Yes | Yes | Yes |
| 51 | Printing & Stationery (Flex Printing, Broad Printing, Notice Printing) | 18% | Yes | Yes | Yes |
| 52 | Recruitment Expenses | 18% | Yes | Yes | Yes |
| 53 | Commission Paid | 18% | Yes | Yes | Yes |
| 54 | Rent Paid for commercial use of premises | 18% | Yes | Yes | Yes |
| 55 | Godown Rent for commercial purpose | 18% | Yes | Yes | Yes |
| 56 | Repair and Maintenance - Building / Electrical | 18% | Yes | Yes | Refer Note 1 |
| / P& M / Others | |||||
| 57 | Room Rent in a hotel, lodge (Rs.2500 to 7500 per room per day | 18% | Yes | Yes | Yes |
| 58 | Payment for Sponsorship Services | 18% | Yes | Yes | No |
| 59 | Security Charges | 18% | Yes | Yes | Yes |
| 60 | Telephone, Mobile & internet Charges | 18% | Yes | No | Refer Note 2 |
| 61 | Sundry Expenses | 18% | Yes | Yes | Yes |
| 62 | Job Work / Labour Charges for garment processing | 18% | Yes | Yes | Yes |
| 63 | Job Work / Labour Charges (Other) | 18% | Yes | Yes | Yes |
| 64 | Sitting Fees, Commission or any other payment made to director by company | 18% | Yes | Yes | Yes |
| 65 | Audit Fees, Account Writing , Professional Fees (other than Advocate) | 18% | Yes | Yes | Yes |
| 66 | Research & Development Expenses | 18% | Yes | Yes | Yes |
| 67 | Food & Beverages Expense (AC restaurant) | 28% | Yes | Yes | No |
| 68 | Wall Paint | 28% | Yes | Yes | No |
| 69 | Room Rent in a hotel, lodge Above ₹ 7500/- | 28% | Yes | Yes | Yes |
| 70 | Travelling Expenses International | 28% | Yes | Yes | No |
| 71 | Amusement Park/ Theatre Ticket | 28% | Yes | Yes | Yes |
| 72 | Cold drink | 40% | Yes | Yes | No |
| 73 | Repairs & maintainance Charges if it has not resulted into immovable property | 18% / 28% | Yes | Yes | Yes |
| 74 | Electrical Fittings | 18% / 28% | Yes | Yes | No |
| 75 | Staff Uniform Expenses | 5% / 12% | Yes | Yes | Yes |
| 76 | Packing material & Packing Charges | 5%/ 12% 18% | Yes | Yes | Yes |
| 77 | Plant & Machinery | Actual Rate | Yes | Yes | Refer Note 3 |
| 78 | Furniture & Fixture | Yes | Yes | Refer Note 3 | |
| 79 | Motor Car | Yes | Yes | No | |
| 80 | Building | Yes | Yes | No | |
| 81 | Office Equipment including Computer, Software & Hardware | Yes | Yes | Refer Note 3 | |
| 82 | Free Gift given to staff (Exempt upto ₹ 50000/- per staff p.a) | Applicable Rate | Yes | Yes | No |
| 83 | Free Gift given to staff (Above ₹ 50000/- per staff p.a) | Yes | Yes | Yes | |
| 84 | Divali/ New year Gift purchased & debited to P & L | Yes | Yes | Yes | |
| Notes: | |||||
| 1) | If repair & maintainance expenses resulted into immovable property than input credit is not available | ||||
| 2) | If Telephone, Mobile & Internet bill is in the name of the company and adress and place of business is mentioned then only one should claim the input credit | ||||
| 3) | Inpur credit is available fully. However if it is sold/disposed off/ scrapped/ thrown away within 5 years, then input credit @ 5% per quarter is available for the used period and balance is to be reversed for not used fully at the time of date of sale. | ||||
| 4) | Input credit is available only if goods & services are used for business. If good or services are used for personal purpose then input credit is not available. If goods & services are used partially for personal use and partially for business use then input credit is available partly in proportion to business use. | ||||
| 5) | Input credit is not available if outward supply of goods or services is exempt from payment of tax. | ||||
| 6) | As per Notification No 8/2017 dated 28/06/17, it is provided that if the aggregate value of goods or services or both debited to Trading A/c or expenses debited to Profit & Loss A/c or purchase of any asset obtained from unregistered suppliers is less than ₹ 5000/- in a day, then tax is not required to be paid for such inward supplies by the receiptent for that particular day. | ||||
| 7) | Details of all purchase of goods or services debited to Trading A/c or purchase of any fixed asset are required to be submitted in GST return whether purchased from registered person or unregistered person or from composition dealer. | ||||
| 8) | However, if any expense items are purchased from unregistered supplier & escape the payment of tax in view of Notifcation No.8/2017 dated 28/06/17 then same are not required to be submitted in GST return. | ||||
Rate of tax under GST on expenses debited to Trading Profit & Loss A/c
KIRTIKUMAR PUROHIT
GST treatment of trading expenses clarifies applicable tax rates and conditions for input tax credit and reverse charge. A categorical schedule assigns GST rates, supplier levy responsibility, reverse charge applicability, and input tax credit eligibility to expenses debited to Trading and Profit & Loss accounts. Zero rated employer/statutory items attract no GST or ITC; most commercial expenses carry specified GST slabs (5%, 12%, 18%, 28% or actual for goods/assets) with ITC generally available when used for business. Capital goods enjoy ITC subject to a pro rata reversal if disposed within five years. Notification No. 8/2017 exempts low value daily purchases from unregistered suppliers from recipient tax payment and reporting. (AI Summary)
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