GST on reimbursement of air tickets

[Rajesh Kumar]

One of our consultant/director is submitting his air tickets for reimbursement with GST, air tickets already attract GST. is it correct?

[VaibhavKumar Jain]

Dear Rajesh,

a. In case of consultant, say your consultant to issue tax invoice (as technical service) with ticket value plus GST @ 18%. This is because, your consultant is eligible for GST credit on air ticket. Based on tax invoice, you are also eligible for ITC charged by consultant.

b. In case of director, reverse charge is applicable. Hence, if your director purchased the ticket, it might be possible that your GST No. is not mentioned on the ticket and the air line shall not issue any tax invoice to you. In this situation, to establish "Pure Agent" will be difficult. Hence, you are liable to pay GST @18% under RCM on whole amount air ticket.

The situation may be different, if the air ticket is booked on your name but initial payment made by director and subsequently take reimbursement. Here, the Pure Agent concept may be established and you may not pay GST under RCM on reimbursement.

Gopabandhu

[Himansu Sekhar]

Sir,

What is your issue? You will only reimburse the amount which includes all the taxes

With regards

[Rajagopalan Ranganathan]

Sir,

As per Sl. No. 8(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as amended " Transport of passengers, with or without accompanied belongings, by air in economy class" is chargeable to gst @ 2.5%. Therefore air ticket attracts gst.

[KASTURI SETHI]

Dear Querist,

Your thinking is correct.

[YAGAY andSUN]

Reimbursement of expenses attracts GST unless until conditions of pure agent fulfilled.

[Ganeshan Kalyani]

Though gst was paid to airline company when reimbursement is sought it will again attract gst.

AI Summary

GST on reimbursement of air tickets: reimbursement attracts GST unless pure agent conditions are satisfied, triggering reverse charge liability. Reimbursement of air ticket costs generally attracts GST unless the conditions for being a pure agent are met. Consultants should issue tax invoices including GST so the payer can claim input tax credit. If a director purchases a ticket and no tax invoice is issued to the payer, the payer may be liable under the reverse charge mechanism on the full ticket amount. If the ticket was booked in the payer's name and only paid initially by the director, the pure agent principle may prevent reverse charge application.