GST on common expenses

[Amresh kumar]

Sir/madam

Is GST levied on common expenses shared among two companies at same premises. This includes salary, electricity, internet, professional charges etc.

Regards

Amresh Kumar

[Ganeshan Kalyani]

Yes, GST is applicable when you recover the expenses borne on behalf of the other company by you. At the same time you will get the credit of the GST paid on the common expenses incurred by you.

[Amresh kumar]

Sir/ madam,

Thanks for prompt reply.

Wether we have to pay gst on electricity also. Further telephone bills & Internet charges are inclusive of gst. What if we don't take ITC and wether the gst have to be charged on proportionate basis.

Any circular & Notfn or authority under the gst act & rules made there under and effective from which date.

Regards

Amresh Kumar

[Ganeshan Kalyani]

Sir, even on electricity GST will have to be charged. This is because when you are not supplying electricity but only recovering that cost.

You can take credit of GST charged on telephone and internet charges proportionate to the amount recovered. If your supplies are taxable then full credit is allowed.

[KASTURI SETHI]

I support the views of Sh.Ganeshan Kalyani Ji. Both are distinct persons. Covered under Schedule 1 . Distribution of electricity is conditionally exempt. No loss as ITC can be taken. The purpose behind taxability is proper accountal of each and every transaction.

AI Summary

GST on recovered common expenses: recoveries attract GST and input tax credit may be claimed on a proportionate basis.
Recoveries of common expenses between distinct entities-such as salary, electricity, telephone and internet-are treated as taxable consideration and GST must be charged; input tax credit on GST paid for those common expenses may be claimed, with telecom and internet credits claimable proportionately to the recoveries and full credit available where the recipient's supplies are taxable.