Export of service

[Kaustubh Karandikar]

XYZ (India) is receiving ‘Technical Consultancy services’ from a person outside India. GST under reverse charge is paid on it by XYZ. Subsequently, XYZ is recovering the amount paid towards consultancy from their parent company outside India. Is XYZ required to pay GST on the amount recovered from parent company?

[Padmanathan KV]

If the transaction is merely a reimbursement/ transfer of fund between parent company and subsidiary company, then it will not be liable to GST.

[Shilpi Jain]

Further details would be required regarding this transaction to comment for the amount received from parent company.

Why is it reimbursed.

AI Summary

GST on reimbursements: mere pass through between parent and subsidiary generally not subject to GST, but facts matter. If the amount recovered from the parent is a mere reimbursement or transfer of funds between parent and subsidiary, it will not be liable to GST; however, detailed facts on the nature and purpose of the recovery are required to determine whether the receipt is a non taxable reimbursement or constitutes taxable consideration.