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
Understanding GST Rates on Business Expenses: From 0% Essentials to 40% Luxuries, Plus Input Credit Rules The article outlines the Goods and Services Tax (GST) rates applicable to various expenses debited to the Trading Profit & Loss Account. It categorizes expenses based on the GST rate, ranging from 0% to 40%, and indicates whether registered suppliers will levy tax, if reverse charge applies for unregistered supplies, and eligibility for input credit. Notably, many essential services such as salaries, electricity, and water charges are taxed at 0%, while services like food and beverages in AC restaurants and international travel are taxed at higher rates. The article also includes notes on input credit eligibility and exceptions for unregistered suppliers. (AI Summary)