GST on sale invoice

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This discussion clarifies whether a subcontractor can charge GST on their invoices to a logistics company. Since both entities are registered and share common directors, they are considered related persons. However, if the logistics company is eligible for full Input Tax Credit (ITC), charging GST on the agreed hire charges is permissible and the GST paid is fully creditable.

sankar ponnan

sankar ponnan (Querist)

04 July 2020 Sir
A logistics Company agrees with sub-contractor to do its part of business for hiring. Then, Sub - contractor raises invoice claiming his hire payment from the company.
Can the sub-contractor charge the GST on the sale invoice?
Here, Both are registered under GST Act.
Logistics company is a private ltd whereas the sub-contractor is a partnership firm.
But the directors for both the units are the same.
guide me please

thanks in adv

Hemal Makwana

Hemal Makwana (Expert)

05 July 2020 yes , gst will be levied if it's taxable supply.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

29 October 2026 Since the two entities share directors they are related persons, so value is open market value under Rule 28; but where the recipient is eligible for full ITC, the invoice value is deemed to be open market value, so charging GST on the agreed hire charges is correct and fully creditable to the company.

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