Services to related party, Goods and Services Tax - GST

[Kaustubh Karandikar]

Employees who are on the pay roll of XYZ are sometimes sent on outdoor duty for carrying out some work in relation to activities of PQR (Related Party). Expenses incurred for the same by the employee are reimbursed to him on voucher at actuals by XYZ. Will it amount to services provided to PQR and since XYZ and PQR are related, even if XYZ is not recovering any amount from PQR, XYZ will be liable to pay GST on it? If yes on what value?

Posts / Replies

[KASTURI SETHI]

You may resort to Rule 30 or 31 of CGST Rules, 2017 and for correct and proper valuation for the purpose of payment of tax, an CMA is the best person to consult. An CMA's cost certificate is also accepted by the department.

[YAGAY andSUN]

In case of transaction between related parties, even book adjustments i.e. making debit and credit entries are treated as making payments and therefore, GST is applicable.