Petty Cash Expenses Incurred on Behalf of Principal

[KUMAR Narasimhan]

Dear Sir / Madam,

An Agent made the Petty cash expenses (Like Tea Expenses, Auto Expenses, Printing and Xerox) and claimed it as reimbursement from Principal.

Question

a) Agent can show this reimbursement expenses as an Exempted Sales and process the same in GSTR-1? Please clarify

b) Agent pays the payment on behalf of Principal, but the Vendor would have raised the Invoice in the name of Principal company. Can Agent raise a reimbursement Expense for the payment made and show this as Exempted sales? Please clarify

AI Summary

Pure agent reimbursement excluded from agent turnover and not reported as sales where pure agent criteria are met.
If an agent meets the CGST rules' pure agent criteria, petty cash reimbursements made on behalf of a principal are excluded from the agent's turnover, need not be treated as taxable supplies, and are not required to be reported as sales in GSTR 1 or as revenue in the agent's financial statements; vendor invoices in the principal's name do not preclude this treatment provided the pure agent conditions are satisfied and properly documented.