GST on employee expenses

[Dhruv Dua]

Company A reimburses employees for the expenses incurred by them in the field (airfare / travel etc). Some of the invoices are in the personal name of the employee and some in the name of the company.

Whether Company A is required to pay reverse charge on applicable reimbursements (employee pays to Goods transport agency for shifting of goods for example) ?

AI Summary

Companies Liable for GST Under RCM on Employee-Reimbursed Freight Expenses via GTA; Consider TDS on Transport Charges A company reimburses employees for expenses incurred in the field, such as airfare and travel, with invoices sometimes in the employee's name and sometimes in the company's. The main question is whether the company must pay GST under reverse charge mechanism (RCM) on these reimbursements, particularly when employees pay a goods transport agency (GTA) for shifting goods. The consensus is that the company must pay GST under RCM since it ultimately bears the freight expenses. Additionally, this principle may apply to purchases from unregistered dealers if RCM becomes applicable. Company policy and tax treatment, including TDS on transportation charges, are also relevant considerations.