GST Chargeability

[Yogesh Khetrapal]

Mr. A (registered dealer) moves on a project on behalf of Company ABC Ltd., received Hotel Bill in the name of ABC Ltd. and claim reimbursement of the same in addition to very nominal amount against D.A.

Whether Mr. A can show receipts as Pure Agent?

Whether Hotel Bill can be taken aside from GST Chargeability?

Whether it makes any difference if Mr. A is running his own Co. XYZ Ltd. and raise the Invoice for professional Services on ABC Ltd. in addition to the reimbursements against Hotel and D.A. and receives the fund in the name of XYZ Ltd.

Please also advice TDS implications to be taken care through ABC Ltd.

[KASTURI SETHI]

Examples of Pure Agent are C & F Agent, Customs House Agent, Travel Agent etc.

[Ganeshan Kalyani]

Pure agent provision is applicable in your case.

[YAGAY andSUN]

TDS as applicable on commission payments would be deductable on such transactions.

[Yogesh Khetrapal]

Respected Experts,

Thanks for your suggestion.

Still I would like to clarify Whether Hotel Bill can be taken aside from GST chargeability?

Whether it makes any difference if Mr. A is running his own Co. XYZ Ltd. and raise the Invoice for professional Services on ABC Ltd. in addition to the reimbursements against hotel and D.A. and receives the fund in the name of XYZ Ltd.

Please also advice TDS implications to be taken care through ABC Ltd.

With Thanks & Regards,

[DR.MARIAPPAN GOVINDARAJAN]

Your case is still more be elaborated.

There are two occasions.

1. A undergoes a project on behalf of ABC Limited. What is the consideration? Whether the TA bill is received from the employee who is working under the control of A?

2. A raises the invoice for professional services on ABC in his own company XYZ Limited. In this case the TA bill is raised by the employee of XYZ limited. In my opinion the professional charges including DA are liable for valuation under GST laws and liable for tax.

In the second case ABC is to recover TDS as per income tax provisions viz.under section 194J.

AI Summary

Pure agent treatment for reimbursed hotel expenses may affect GST chargeability, while professional invoices with reimbursements attract GST. Reimbursed hotel and travel allowances may be excluded from GST if they qualify as pure agent transactions; however, where the intermediary or its company invoices the principal for professional services and includes reimbursements for hotel and DA, those professional charges and attendant allowances are liable to valuation under GST and included in the taxable base. TDS obligations on such professional payments should be applied by the principal.