GST on Debit Note.

[MAHESH MAIYA]

Dear Experts,

We are 100% subsidiary of German Company (parent co). As per parent company requirement, we (subsidiary) get our accounts audited every calender year. The auditor will raise his professional GST bill on us(subsidiary) and we debit the total invoice amount to our Parent Company. The debit note will be either re-imbursed by our parent company OR we will adjust the debit note amount against their future payments. What is the GST implication on us (subsidiary)?. If there is GST implication on subsidiary, would it not be amounting to double taxation on same service?

Mahesh Maiya. P

AI Summary

Reimbursement of professional fees: not a taxable supply, GST applies only when the supplier provides the service.
The subsidiary's payment to auditors for professional audit services is the taxable supply and the auditors are liable to GST if thresholds are crossed; a subsequent reimbursement or debit note issued to the parent that merely recovers that payment is a transaction in money lacking the element of service and therefore does not itself constitute a taxable supply, although place-of-provision rules may affect whether the underlying audit service is within GST jurisdiction.