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Gst on employee benifit expenses

Neha Jain (Chartered Accountant) (1085 Points)

29 July 2017

Suppose company allow traveling expenses to employee(business purpose)
Case 1: whether company can avail ITC on gst paid on IRCTC tickets.
Case2: company send its employees to tour for business purpose than for Hotel bill expenses and other on whixh GST charged than what procedure to be follow to avail ITC on this.
Case 3: If any tour expenses occurred from URD than RCM applicable or not, If applicable than ITC available or not.
Case4 If company rapay these charges to employee itself than ITC available or not, RCm applicable or not.

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16 Replies

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

case no. 1 you can't take itc but billing is made to company with gst no. you can take gst itc

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

there are options gstin. Please fill a form and get itc

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

same rply of case 2

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

case 4 there are relationship between employees and employer. No rcm applicable no gst applicable

Neha Jain (Chartered Accountant) (1085 Points)
Replied 29 July 2017

In that case , employee pay GST in hotel but due to repay him, employer will be in loss as he cannot avail ITC but pay full amount to employee??

Neha Jain (Chartered Accountant) (1085 Points)
Replied 29 July 2017

But IRCTC doent give you a bill and ticket will be in the name of employee

Neha Jain (Chartered Accountant) (1085 Points)
Replied 29 July 2017

there are options gstin. Please fill a form and get itc
Which form

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

When you are book a ticket then show a form please open irctc site

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

You are take itc if hotel bill are issue company name with gst no.

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

You are take itc if hotel bill are issue company name with gst no.

Neha Jain (Chartered Accountant) (1085 Points)
Replied 29 July 2017

Thank you..... I will Check this

sunil kumar sharma (jr accountant) (708 Points)
Replied 29 July 2017

Welcome And tell me if any wrong answer

Neha Jain (Chartered Accountant) (1085 Points)
Replied 29 July 2017

I didnt find any form on IRCTC site

Ayan Binani (Deputy Manager(Finance)-CA) (60 Points)
Replied 01 August 2017

Dear Ms. Neha,

For Case No. 3:

There can be two scenarios in this case:

a. Where the company reimburses the expenses at actual.

b. Where the company gives a fixed allowance for local travel and food expenses.

In case of Scenario a., since the company is reimbursing and thereby bearing all the expenses of the tour, the incidence of the expenses is being ultimately borne by the company and such expenses paid to URDs by the employee shall be liable to GST under RCM.

However, in case of Scenario b., the company is merely paying the employee an allowance irrespective of the fact the actual expenses incurred by the latter might be different than the allowance. The incidence of tour expense is not borne by the employer in this case, it is borne wholly by the employee. What the company bears is the allowance which it pays to employee under the employer-employee relationship, which is not a supply. Thus,GST under RCM shall not be applicable in this case.

A doubt might arise that in some organization allowance is restricted to the amount of allowance prescribed or actual expenses whichever is lower, then shall Scenario a. be applicable?

The answer would be no, since the event in light is restriction of the allowance and not reimbursement of actual expenses.

As for the latter part of the question, GST paid under RCM shall be eligble for input tax credit.

Hope you find my views useful and helpful.

Regards.

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