GST on cross charge/Reimbursement within India and outside India

[Shrikanth Parmarthy]

Hi experts,

Scenario 1:

Employee from Indian Company A travelled to Sister concern in Europe - Company B. The travel and hotel related expenses in Europe were borne by Company A and now the company A in India wants to charge those expenses to Company B without mark up. 

Query : Will the cross charge be treated as supply and GST is applied on the same. If yes what is the GST rate

Scenario 2:

Employee from Indian company A located in Tamilnadu travelled to Subsidiary Company in Maharashtra - Company B. The travel and hotel related expenses  were borne by Company A and now the company A in India wants to reimburse those expenses without mark up. 

Query:Will the cross charge  be treated as supply and GST is applied on the same. If yes what is the GST rate

AI Summary

GST on cross-charge of travel and hotel expenses: export zero-rated if paid in forex; domestic IGST 18%.
Cross-charges of travel and hotel expenses are treated as supplies invoiced at market value. Cross-charges to foreign recipients may be zero-rated as exports if payment is in foreign exchange and factual conditions support export treatment; cross-charges between distinct persons in India attract IGST with the recipient eligible for input tax credit where entitlement exists.