Freight, rcm & reimbursement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2018 Dear Experts,
As supplier we have paid the freight Rs. 2300/- on the behalf of our buyer on sale. However buyer will reimburse the freight amount to us. Pls clarify :- in this scenario who is liable to pay Tax under RCM and who will claim ITC?

Thanks
Mukul Gupta

Ketan Samdani

Ketan Samdani (Expert)
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26 June 2018 Your buyer shall be liable to pay GST under RCM since the charge of freight will be reflected in their P/L A/c/. Your account will be squared off on reimbursement of expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2018 Sir. I think as per the GST rule freight payer will pay the Tax under RCM . however by following the accounting treatment since the actually cost of freight will be borne by buyer therefore buyer can claim the ITC,

Pls clarify.. Is it correct

Ketan Samdani

Ketan Samdani (Expert)
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27 June 2018 Buyer will have to pay GST and subsequently claim its ITC.

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