Gst applicability on cost sharing arrangement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2017 Indian Private limited company carrying on machine manufacturing business has German company as an investor with 60 % holding ( who is also technology provider with Royalty to Indian Company)

Now, under cost-sharing arrangement German company is going to reimbursement Salary of Indian staff as actual and 50% of Rent and Marketing expense on an actual basis to Indian company every month (motive behind arrangement is to help Indian company market in initial years)

whether Indian company required to charge GST on expenses while claiming such reimbursement?

If someone has come across such transaction, kindly share the views taken.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 December 2017 GST not applicable on reimbursement of expenses by holding company.
Generally GST should not be borne by foreign resident/foreign entity.
When a foreign resident buys goods in India pays GST the GST paid will be refunded at the airport.
GST not applicable on export of goods and services.

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