Can a service provider require the client to enter into a contract stipulating that the client will refund the GST amount to the provider after the client has successfully claimed the refund from the GST department?
Does the GST framework permit a contractual arrangement whereby a client agrees to refund the GST amount to the service provider after the Client has claimed the refund from the GST department?
The GST framework generally directs refunds to the party bearing the tax burden to prevent unjust enrichment. While private contracts can stipulate the subsequent transfer of these funds between parties, such agreements must be carefully drafted to ensure they do not violate statutory principles or create secondary tax liabilities.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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