Whether GST Cross-Charge is Required on Recovery of Common Development Cost from Group Entities?

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....hether GST Cross-Charge is Required on Recovery of Common Development Cost from Group Entities?<br> Query (Issue) Started By: - Kumar Gaurav Dated:- 9-7-2026 Last Reply Date:- 19-7-2026 Goods and Services Tax - GST<br>Got 3 Replies<br>GST<br>XYZ Ltd. (Head Office) is incurring development cost for creation of a common digital portal, which will subsequently be allocated among interested other GSTI....

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....N of the same entity on a cost-to-cost basis. Whether such recovery/allocation of Cost from HO to other GSTIN would require issuance of a cross-charge invoice under GST, or can it be treated as a mere cost allocation/reimbursement without GST implications? Reply By Sadanand Bulbule: The Reply: Since each GST registration is treated as a distinct person under Section 25(4) of the CGST Act, ....

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....allocation of common portal development cost by the Head Office to other GSTINs constitutes a supply under Section 7(1)(c) read with Entry 2 of Schedule I. Accordingly, the Head Office is required to issue a cross-charge tax invoice and discharge GST in accordance with Rule 28 of the CGST Rules. It cannot be treated as a mere reimbursement or cost allocation. Reply By Shilpi Jain: The Reply: ....

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....All these costs at the time of incurrence itself, GST invoice should be taken in the ISD registration and distributed to all the GSTNs. THen the question of cross charge will not arise. &nbsp; Reply By Shilpi Jain: The Reply: Note that ISD is mandatory from 1.4.2025 and not a choice<br> Discussion Forum - Knowledge Sharing ....