TaxTMI 
TaxTMI 
Mr. A is MD of software company ABC Ltd. ABC Ltd is subsidiary company of XYZ Ltd. (USA). Mr. A went to USA to meet the officials of the parent company for business purpose. During his visit, Expenses like Hotel stay, Air tickets, cab etc. were incurred. All this expenses were borne by ABC lTD. Now ABC ltd is raising the invoice on parent company to recover this expenses incurred. Comment whether this will be treated as Export of services? Also let us know which SAC code should be used for this.
GST - Reimbursement of Expenses - Export of service
15 Mar 2025 
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Reimbursement of expenses as export of services depends on invoice structuring and composite supply classification.
Recovery of travel and related expenses by a subsidiary from its foreign parent may be treated either as a taxable reimbursement under the statutory deeming of certain supplies or, if invoiced as part of the principal exported service as a composite supply using the same SAC, as part of the export of services and not separately liable to GST; forum responses stress invoice structuring and classification, and caution that mischaracterisation could attract departmental scrutiny or be treated as import of services. (AI Summary)
Recovery of travel and related expenses by a subsidiary from its foreign parent may be treated either as a taxable reimbursement under the statutory deeming of certain supplies or, if invoiced as part of the principal exported service as a composite supply using the same SAC, as part of the export of services and not separately liable to GST; forum responses stress invoice structuring and classification, and caution that mischaracterisation could attract departmental scrutiny or be treated as import of services. (AI Summary)