Dhrunil Bhatt (Chartered Accountant) 15 May 2019
I am giving you one example here in which lets say there are three companies (Company A, Company B and Company S). Company A and B are inter companies (under a roof of a group company). The company S is a customer company which is located in SEZ Unit.
Now lets suppose company S, the customer company wants services from company A. In order to provide the service, Company A raised a service PO on Company B for the providing the service to Company S (which is the customer of Company A).
Company B provided the service to company S against the service PO raised by company A.
Now, as Company S is located in SEZ unit, invoice would be raised by company A to Company S without charging IGST in the invoice (under a LUT / Bond).
The question is, how would the invoice be raised by Company B on Company A for the services provided. Note that none of these companies (A or B) are located in SEZ Unit. Whether company B would raise the invoice normally (i.e. by charging IGST) on Company A or it would not charge any GST (as the ultimate sale was made to SEZ Unit)
My opinion is that GST shall be charged by Company B in the invoice issued on Company A.
Kindly support your answer with relevant provisions of the Act.
Thanks and Regards,
A Kalita (Sr. Manager) 16 May 2019
I have a GST scenario I am describing below, and looking for suggestions from you.
I have procured cement for Rs1 lakh from a dealer after paying GST. Then I have issued a part of that quantity of cement to a contractor who was awarded a contract to build a concrete house. The rest of the items and manpower was arranged by the contractor. Say the value of cement issued to him is 50 thousand.
Now the contractor has submitted a bill of Rs. 5 lakhs as per schedule of rates which included cost for Sand, Stone Chips, Steel etc ( all items apart from Cement) and Service Charges for the manpower ( Including his profit). He has claimed GST on the total amount of 5 Lakhs.
The value for the Cement issued to him will be deducted from the Contractor’s Bill.
Now, Do I deduct the GST portion for cement from his bill, since I have already paid the GST for cement? Or I have to pay GST on the total amount of 5 lakhs? (The rates for GST are different in contractors bill and for cement)