TaxTMI 
TaxTMI 
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?
Recovery of Hotel Expenses
07 Dec 2022 
4 Replies 
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GST liability on recovered hotel expenses depends on supplier-recipient characterisation and invoicing, affecting ITC and B2C treatment.
GST on hotel expenses recovered from a foreign parent depends on whether the Indian subsidiary is the supplier or is merely being reimbursed. If recovery is consideration for a service provided by the Indian entity, GST applies unless zero-rated; if it is a bare reimbursement and the hotel invoices the foreign parent (B2C), no GST arises. Charging a service fee converts the transaction into a taxable supply and affects input tax credit eligibility. (AI Summary)
GST on hotel expenses recovered from a foreign parent depends on whether the Indian subsidiary is the supplier or is merely being reimbursed. If recovery is consideration for a service provided by the Indian entity, GST applies unless zero-rated; if it is a bare reimbursement and the hotel invoices the foreign parent (B2C), no GST arises. Charging a service fee converts the transaction into a taxable supply and affects input tax credit eligibility. (AI Summary)