GST on employee reimbursement

[Archna Gupta]

Please reply to my below mentioned query:

Suppose the employer is a company and its employees incur certain expenditure such as local conveyance, travelling expenses, boarding & lodging for office work or any other expenses on behalf of its employer company. The employee files with the company Reimbursement claim sheet for a certain period then what will be the treatment in the following situations:

The invoices are raised in the name of the employee and the supplier is:

► Unregistered (invoice is raised during the period 01-07-17 to 12-10-17). If the company claims these expenses in its P&L a/c under respective heads such as Conveyance exp, Travelling expenses etc. whether it would be required to deposit GST under reverse charge? In certain type of expenses such as auto fare, food expenses from road side vendor etc. where the invoices are not available, is the company is liable to pay GST under reverse charge?

► Registered supplier then the company would simply claim expenses (including GST) in its P&L a/c .

►Whether the above transactions would be treated as supply as the invoices are in the name of the employee.

[OM PRAKASH]

You Can't claim GST Input on travelling Expenses

AI Summary

GST on employee reimbursements: reverse charge may apply for unregistered suppliers, limiting employers' input tax claims.
GST treatment of employee-incurred expenses depends on supplier registration, documentary evidence and whether the expense is a supply to the employer. Registered suppliers with proper invoices permit the employer to expense the cost including GST and seek input tax credit subject to eligibility. Invoices in the employee's name or supplies from unregistered vendors may trigger reverse charge exposure or preclude input tax credit where documentary proof is lacking, particularly for informal items like auto fares or roadside food.