GST on amount recovered from parent company

[Kaustubh Karandikar]

An employee of XYZ(India) had undergone an SAP Certification Programme. The fees were initially paid by the employee to the programme organizer outside India which XYZ subsequently reimbursed to the employee. The amount so reimbursed by XYZ was subsequently charged by XYZ to their parent company abroad. Is XYZ liable to pay GST on the amount charged to parent company?

AI Summary

XYZ Liable to Pay IGST on SAP Certification Fees; Parent Company Reimbursement Not Subject to GST Per Section 13(3)(b) IGST Act. An employee of XYZ (India) paid for an SAP Certification Programme organized outside India, with the fee later reimbursed by XYZ. XYZ then charged this amount to its parent company abroad. The discussion revolves around whether XYZ is liable to pay GST on this transaction. It was concluded that XYZ must pay IGST under the reverse charge mechanism (RCM) for the imported service. However, the reimbursement from the parent company does not attract GST, as it is not considered payment for a service provided by XYZ. This view aligns with Section 13(3)(b) of the IGST Act.