Recovery of Hotel Expenses

[Kaustubh Karandikar]

XYZ (India) is having a parent company PQR(Germany). Employees of PQR are coming to India for official work and their hotel expenses are initially paid by XYZ and then the same is subsequently recovered from PQR through a debit note. Is XYZ liable to pay GST on the amount recovered from PQR?

AI Summary

Is GST applicable on hotel expenses recovered by Indian subsidiary from German parent company? Analysis of service agreements. An Indian subsidiary, XYZ, covers hotel expenses for employees of its German parent company, PQR, during their business trips to India. The expenses are later recovered from PQR through a debit note. The discussion explores whether XYZ is liable to pay GST on the recovered amounts. One opinion suggests GST is applicable if XYZ is deemed a service supplier to PQR, while another indicates no GST if it's merely a payment arrangement. The liability may change if the transaction is part of a broader service agreement. The forum highlights the need to analyze the entire arrangement to determine GST applicability.