GST on reimbursements

[Madhavan iyengar]

Company A based in india it has 2 directors 1 director has purchased some services and software from foreign vendor who raised invoice on director

subsequently director presented the bills to company A and got reimbursements

whether these reimbursements paid by Company A to its directors will attract RCM

AI Summary

Reverse charge mechanism may apply to reimbursements where director is a non employee and services amount to imported supply.
GST liability on reimbursements depends on whether the director is an employee (true reimbursement not subject to GST) or a non employee supplier, and whether the underlying procurement constitutes import of services; if the director is a non employee and the service is imported and used for the company, the company may be liable under the reverse charge mechanism, requiring analysis of contract terms, business nexus and whether the payment is consideration.