Services to related person

[Kaustubh Karandikar]

Amount is paid by XYZ Pvt. Ltd. directly to the vendors in relation to new Residential Flat owned by the Director of XYZ Pvt. Ltd. The director is an wholetime director. This amount is initially paid by XYZ to the vendors and then is adjusted against the loan earlier given by the director to XYZ. If no amount is shown as outstanding to be paid to director against loan given by director, the amount paid to vendors by XYZ is shown as loan given to director in the books of accounts. Is XYZ liable to pay GST on the amount paid to vendors since it will be treated as service given to related person?

AI Summary

Clarification Sought on GST Liability for Payments by XYZ Pvt. Ltd. to Director's Vendors Under Section 15 XYZ Pvt. Ltd. paid vendors for expenses related to a new residential flat owned by its whole-time director. This payment was adjusted against a loan previously given by the director to XYZ. If there is no outstanding loan amount owed to the director, the payment is recorded as a loan to the director in the company's accounts. The query seeks clarification on whether XYZ is liable to pay Goods and Services Tax (GST) on these payments, as they may be considered services provided to a related person.