Gst applicability on reimbursement of internet charges by client

[Shan S]

Internet Service is registered in individual freelancer name, and the amount of internet charge is reimbursed by the foreign client on monthly basis, when bill is produced.

Amount is credited in bank account. Does the reimbursement invoice attracts GST?

[Sadanand Bulbule]

The reimbursement attracts GST as an incidental operational expense under Section 15(2)(c) because the connection is in your name, disqualifying it from the "pure agent" exemption under Rule 33.

Consequently, it forms part of your total taxable service value and is either taxable at 18% IGST or zero-rated if your freelancing qualifies as an export of service under an LUT.

AI Summary

GST on reimbursed internet charges is questioned where a foreign client repays a freelancer's monthly billed connection costs.
GST applicability is raised for monthly reimbursement of internet charges where an internet service registered in an individual freelancer's name is repaid by a foreign client after bills are produced. The reimbursement is credited to the freelancer's bank account, requiring consideration of whether the related reimbursement invoice attracts GST.