Gst on reimbursement of travelling expense

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This query is : Resolved

CA Naishadh trivedi (Querist)

12 January 2018 Dear Experts,

Our company has hired a person to impart training to employees. The trainer has raised the following invoice:
1) Service charge/Training charge and GST thereon (Our company have no issue on this)
2) Traveling Charge {The trainer has booked tickets for to and fro journey and has raised invoice for the actual amount of expense (actual Flight Ticket cost) plus GST thereon}

Question - 1) Whether the trainer is right in issuing invoice for the amount on reimbursement?? Since airline has already charged GST on their ticket. Further the trainer is adding GST on it. Please note that our company is not eligible to take credit on input services and therefore any payment made towards GST on input is a cost for company.

2) Whether we can exclude this reimbursement under pure agent???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 January 2018 1 Trainer is right in issuing invoice for reimbursement.
2 No these will not fall within ambit of pure agent. Expenses incurred are for the purpose of provision of services.

Udaya Chandran

Udaya Chandran (Expert)

12 January 2018 GST is not applicable on reimbursements. You can't take ITC on reimbursements. Further, the party cannot charge GST on such services as pure agent.

CA Naishadh trivedi

CA Naishadh trivedi (Querist)

15 February 2018 Dear Sir,

Still not clear as both the answers do not match

Udaya Chandran

Udaya Chandran (Expert)

15 February 2018 He is not a pure agent. He is providing the service and incurs expenditure to provide such service. Then he can issue invoice for the amount.

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