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Service to related person, Goods and Services Tax - GST

Issue Id: - 117489
Dated: 14-9-2021
By:- Kaustubh Karandikar
Service to related person

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XYZ (Proprietory Concern) and PQR(Proprietory Concern) are related persons (Brothers). On behalf of PQR, XYZ had paid the amount of Income Tax and other taxes to Govt. and then subsequently recovered from PQR. Will this amount to service provided to related person under Schedule – I of Section – 7 and even if there is no consideration, XYZ will be liable to pay GST on it?

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Showing Replies 1 to 5 of 5 Records

1 Dated: 14-9-2021
By:- Shilpi Jain

This will not be liable as there is no supply. This is merely an on behalf payment...

2 Dated: 14-9-2021
By:- Shilpi Jain

Just because 2 persons are related the provisions should not be stretched to such an extent to tax each and every kind of transaction between them.

3 Dated: 14-9-2021

XYZ's activity is not in the course of business or furtherance of business. Hence out of scope of supply as well as Schedule-1.

4 Dated: 16-9-2021
By:- Ganeshan Kalyani

Is this not a support service?. Is the transaction fulfills pure agent concept?

5 Dated: 17-9-2021

Sh.Ganeshan Kalyani Ji,

(i) Is the transaction fulfills pure agent concept ?

Yes, Sir. This transaction can be termed as pure agent's activity.

(ii) Is this not a support service ?.

This transaction/activity cannot be termed as support service inasmuch as this is neither the intention of legislature nor Govt's to tax such transaction. Calling such activity a support service, means stretching a law.


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