GST on reimbursements

[Madhavan iyengar]

Company A is based in India and sells the products in India to customers These products imported from its Parent B located in USA

Company A incurs marketing and advertising expenditure and this expenditure is reimbursed by Parent company B ( ie back to back reimbursement)

Query: Will the reimbursement of marketing and advertisement expenses received by Company A in India from its Parent B Located in USA liable for GST in the hands of Company A

AI Summary

Debate on GST Liability for Reimbursement of Marketing Expenses by Parent Company in India: Multiple Views Analyzed Company A in India imports products from its Parent B in the USA and sells them locally. Company A incurs marketing and advertising expenses, which are reimbursed by Parent B. The query is whether these reimbursements are subject to GST in India. One opinion suggests that GST is payable as these expenses form part of the service value provided by Company A. Another perspective argues that since the reimbursement is a back-to-back cost without underlying supply, it may not attract GST. A third view considers it a pure agent relationship, implying no GST implications.