TaxTMI 
TaxTMI 
A manufacturer supplies equipment to a buyer. Due to incorrect installation by buyer equipment malfunctions. Buyer contacts seller to come urgently to resolve issue and agrees to bear traveling and visit expenses. The supplier travels by air and taxi to reach destination urgently and return. Buyer reimburses traveling expenses incurred to seller. Seller does claim ITC on traveling expenses incurred. Is GST applicable on reimbursement received for traveling and visit.
Reimbursement of Traveling and visit
11 Sep 2018 
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Reimbursement for travel: GST applies unless treated as pure agent, then no GST and buyer claims input tax.
GST on reimbursement of travel depends on characterisation: if the supplier treats travel expenses as its own and claims input tax credit, the reimbursement is consideration and attracts output GST; if the supplier acts as a pure agent incurring expenses on behalf of the buyer with exact amounts invoiced or accounted accordingly, the reimbursement is not taxable and input tax credit belongs to the buyer. (AI Summary)
GST on reimbursement of travel depends on characterisation: if the supplier treats travel expenses as its own and claims input tax credit, the reimbursement is consideration and attracts output GST; if the supplier acts as a pure agent incurring expenses on behalf of the buyer with exact amounts invoiced or accounted accordingly, the reimbursement is not taxable and input tax credit belongs to the buyer. (AI Summary)