Reverse Charge on Employee Reimbursement
prakash chand (1 Points)
27 July 2017
whether we have to do reverse charge for employee reimbusements like conveyance...
8 Replies
natarajan
(SM - Audit & Taxation)
(156 Points)
Replied 27 July 2017
Dear prakash,
service rendered by the employee to employer is not subject to gst.
the amount reimbursed to the employee doesnot partake the character of unregistered purchase.
there is no service element here.
hence will not attract gst
NatarajAn
service rendered by the employee to employer is not subject to gst.
the amount reimbursed to the employee doesnot partake the character of unregistered purchase.
there is no service element here.
hence will not attract gst
NatarajAn
RAJA P M
("Do the Right Thing...!!!")
(128101 Points)
Replied 27 July 2017
Please define anyone, 'What is the meaning if conveyance...? and Which expenses including conveyance....?
Pankaj Arya
(Manager Finance)
(122 Points)
Replied 02 August 2017
In my view, conveyance should be covered under GST.
Otherwise, this can be used for evasion of GST.
e.g. if an employee hires a taxi (unregistered dealer) and incurs Rs. 1000 on the same. Since, it is a business expense GST must be paid on reverse charge basis.
If I ask my employee, not to attach the bill of taxi with his reimbursement claim, and instead charge it as if he used his own vehicle and reimurse him on the basis of say, 100 Kms @ 10 per km, such reimbursement should also attract GST on reverse charge basis, otherwise we can easily evade GST.
Readers views are solicited...
Pankaj
RAJA P M
("Do the Right Thing...!!!")
(128101 Points)
Replied 02 August 2017
@ Pankaj.,
You are exactly correct.
The Employee directly consume the expense then we can consider to welfare / reimbursement.....
You are exactly correct.
The Employee directly consume the expense then we can consider to welfare / reimbursement.....
Pankaj Arya
(Manager Finance)
(122 Points)
Replied 02 August 2017
Sir, My opinion is, even if an employee (e.g. Business development team or an operations manager) consumes food or beverages from an Unregistered Supplier in the market e.g. he buys a cold drink and gets it reimbursed from the Company, the expense is not staff welfare, strictly speaking. Its a business development/ operating expense
The reverse charge would be applicable on the same.
Even if I consider it as staff welfare, is there any relaxation/exemption for staff welfare. I think NO.
Any other views please...
rgds
Pankaj A
RAJA P M
("Do the Right Thing...!!!")
(128101 Points)
Replied 02 August 2017
Dear Pankaj Arya.,
Staff directly consumed items are not under GST. If they are giving to his customers then its consider as Business dealing.
Food, Tea coffee and snacks also feed a person with or without company's support. So, Company ll be given for employees satisfied for full bledging of his service...
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