Services to related person

[Kaustubh Karandikar]

XYZ is carrying out job work for PQR. Both XYZ and PQR are related since having common directors. All the expenses incurred by XYZ such as salary, water bill, electricity bill etc. are initially borne by PQR and while paying the job work charges to XYZ, the same are recovered and net amount is paid to XYZ by PQR. Is PQR liable to pay GST on the amount initially paid for expenses on behalf XYZ being related persons?

AI Summary

GST Liability on Expenses Paid by PQR for XYZ's Job Work: Are Related Entities Required to Pay? XYZ performs job work for PQR, and both entities are related due to common directors. PQR initially covers expenses like salary, water, and electricity bills for XYZ. When paying job work charges to XYZ, PQR deducts these expenses and pays the net amount. The query seeks to determine if PQR must pay GST on the expenses initially paid on behalf of XYZ, considering their status as related persons.