Reimbursement invoice in GST
This query is : Resolved
16 October 2025
Sir,
(A) person ordered Fuel to (B) and Pumping and delivery work to (C). B and C raised invoice with GST and materials sent to A. A rise invoice to (D) using SAC code for the amount paid to B and C as taxable value without GST.
A says that he is an agent, not supplying fuel and do not have vehicle to deliver the materials. This is reimbursement only hence he is not charged GST.
No reimbursement invoice in GST. Please advice
(A) person ordered Fuel to (B) and Pumping and delivery work to (C). B and C raised invoice with GST and materials sent to A. A rise invoice to (D) using SAC code for the amount paid to B and C as taxable value without GST.
A says that he is an agent, not supplying fuel and do not have vehicle to deliver the materials. This is reimbursement only hence he is not charged GST.
No reimbursement invoice in GST. Please advice
16 October 2025
If A acts strictly as a pure agent (incurs expenses on behalf of D, without adding value or markup, and invoices only reimbursement of actual costs to D), GST need not be charged separately on the reimbursement invoice.
The conditions include:
A must disclose reimbursement separately.
The actual supplier (B and C) must invoice A.
D must be the actual recipient of goods/services.
The contract/agreement should mention A as "agent" and only facilitator.
If any conditions are not met, GST will typically apply on the entire value, including reimbursement, as per Section 15 of the CGST Act.
The conditions include:
A must disclose reimbursement separately.
The actual supplier (B and C) must invoice A.
D must be the actual recipient of goods/services.
The contract/agreement should mention A as "agent" and only facilitator.
If any conditions are not met, GST will typically apply on the entire value, including reimbursement, as per Section 15 of the CGST Act.
16 October 2025
SAC code for facilitation/agency services should only be applied if any service is provided, not for pure reimbursement.
GST law does not provide for a separate "reimbursement invoice". If A is not providing a taxable supply/service (besides acting as pure agent), the reimbursement of B/C’s invoices is not taxable in A’s hands.
Ensure formal documentation showing A is a pure agent (agreement, disclosure, invoice details).
Do not include any markup or value addition; only pass through actual invoices paid.
Reimbursement invoice should reference underlying original invoices (from B and C) and explain the pure agency scenario.
If above criteria are strictly followed and documented, A need not charge GST to D for the reimbursement.
If not, GST is required on total invoice value as per normal rules.
GST law does not provide for a separate "reimbursement invoice". If A is not providing a taxable supply/service (besides acting as pure agent), the reimbursement of B/C’s invoices is not taxable in A’s hands.
Ensure formal documentation showing A is a pure agent (agreement, disclosure, invoice details).
Do not include any markup or value addition; only pass through actual invoices paid.
Reimbursement invoice should reference underlying original invoices (from B and C) and explain the pure agency scenario.
If above criteria are strictly followed and documented, A need not charge GST to D for the reimbursement.
If not, GST is required on total invoice value as per normal rules.
16 October 2025
GST on reimbursement depends on whether the person (A) is acting as a "pure agent" under GST law, or simply passing through expenses, and whether the conditions for pure agency are satisfied. If A is not supplying fuel or transport, does not own vehicles, and only passes on actual costs paid to B and C without markup, GST will generally not be charged on these reimbursements if A can prove pure agency status under Rule 33 of CGST Rules.
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