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Kaustubh Ram Karandikar (Corporate Consultant- Central Excise & Service Tax)     22 September 2021

GST on reimbursement of expenses vis - a - vis reversal of ITC

XYZ(India) supplying services of Freight Forwarders / Clearing and forwarding agents and are mainly in providing transportation services in relation to import and export by sea and air. During providing these services, they pay on behalf of their client certain charges to different authorities and then get it reimbursed from their client at actuals. 1) Is XYZ required to pay GST on these charges recovered? If no, are they required to proportionately reverse the input tax credit for common services since not charging GST on reimbursement?

 2 Replies


VIKAS ESNAPURAM (CA-JOB)     22 September 2021

1). GST is not required to be paid if a separate invoice is being issued by XYZ Ltd to their clients for the same and the amount paid is including Gst to XYZ ltd by their clients you should also have a valid TAX Invoice on your name from those authorities for which amount is being paid to claim ITC.

2). No concept of reversal of ITC.

Rajkumar Patel

Rajkumar Patel   22 September 2021

Kindly refer Rule 33 of CGST Rule (concept of pure Agent)

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