Recovery of expense from customer

[KARAN VERMA]

Sir, i am taking services of contractor labour for some work related to my customer. Now, contractor raise invoice on me for the work with GST.

And I want to recover the same expense from customer.

Can I required to raise GST invoice for recovery of same expense. If yes, whether i am eligible to claim ITC on invoice raised by contractor on me.

Except above, my all other supplies are Non GST supplies.

[Rajagopalan Ranganathan]

Sir,

What is the nature of service provided by you? If it is exempted/non-GST then the gst charged by your labour contractor will become part of the cost since the service provided by you is exempted/non-gst you are not eligible to availITC.

[Ganeshan Kalyani]

Here, there is one to one co-relation. I mean, though your normal supplies are non-gst , but , in my view, this single transaction is to be treated separately.

You can raise a tax invoice on your customer as 'support service' by charging GST. You can take credit of the GST charged by your labour contractor on you. You can keep the amount of the transaction same (if you had not made any margin) so that credit is equal to liability.

[Ganeshan Kalyani]

Or, you can ask your labour contractor to raise invoice on your customer (actual recipient of service) directly.

[YAGAY andSUN]

Please review the terms and condition of the contract which you entered with the contractor and with your customer to avail the ITC and charge the GST accordingly.

AI Summary

Can you claim ITC on a GST-inclusive contractor invoice? Explore exemptions, separate transactions, and direct invoicing options. A user inquired about recovering expenses from a customer after receiving a GST-inclusive invoice from a contractor for labor services. The user asked if they should issue a GST invoice to the customer and if they could claim Input Tax Credit (ITC) on the contractor's invoice. Responses varied: one suggested that if the user's services are exempt/non-GST, they cannot claim ITC; another advised treating the transaction separately, allowing for a GST invoice and ITC claim. Alternatively, it was suggested to have the contractor invoice the customer directly. Reviewing contract terms was also recommended.