TMI BlogREIMBURSEMENT OF EXPENSES ON AIR TICKETSX X X X Extracts X X X X X X X X Extracts X X X X ..... WHETHER A SERVICE PROVIDER WHO GET REIMBURSEMENT OF TRAIN TICKETS, AIR TICKETS ON ACTUAL BASIS LIABLE TO PAY GST @18% ON THE COST OF TICKETS - Reply By Ganeshan Kalyani - The Reply = Can you please elaborate your query with an example. - Reply By ROHIT GOEL - The Reply = Example: A chartered Accountant travel by air and cost of air ticket reimbursed by client. Question whether gst is to be ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged on cost of air ticket along with audit fees - Reply By KASTURI SETHI - The Reply = NOT required to pay GST on cost of tickets. Cost of ticket cannot be part of transaction value because it does not go into your pocket. You pay and then get reimbursement. GST already paid. No double taxation. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Whether the service provider can take input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax credit on the air ticket of Chartered Accountant? - Reply By Alkesh Jani - The Reply = Sir, In this regards, I bit confused, as Air ticket can be Input Tax Credit for CA and CA can give discount of taxes taken as input tax credit. Your special guidance is required please - Reply By Himansu Sekhar - The Reply = Yes, it will be a part of the value. Gst will be applicable on it. The expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses are in relation to the taxable supply - Reply By KASTURI SETHI - The Reply = Can be part of value if he is not pure agent. - Reply By Ganeshan Kalyani - The Reply = Chartered Accountant has to include travel expenses in his professional fees to work out GST payable. He is not pure agent in this case. - Reply By JAIPRAKASH RUIA - The Reply = in my view, If the ticket are in the name of CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , CA has to take the credit of GST charged in bill and bill to client with applicable GST rate ( As applicable on fee) on the value of fee, inclusive of ticket value net of GST (irrespective of the rate of GST on ticket), However, If the ticket is directly in the name of client but paid by CA, then pure agent concept comes in picture. In that case also the CA will bill separately for ticket inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive of GST amount without creating liability for GST but for that all the condition of pure agent has to be fulfilled by client as we as pure agent. - Reply By KASTURI SETHI - The Reply = Yes. Sir. I agree with you to the extent of concept of pure agent. C.A. works as pure agent also. - Reply By Himansu Sekhar - The Reply = With humility I slightly differ from Sri Ruia's view. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 33 of the CGST Rules,2017 .Value of supply of services in case of pure agent.-Notwithstanding anything contained in the provisions of this Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,- (i) the supplier acts as a pure agent of the recip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient of the supply, when he makes the payment to the third party on authorisation by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in addition to the services he supplies on his own account. Explanation.- For the purposes of this rule, the expression pure agent means a person who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. Illustration.- Corporate services firm A is engaged to handle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal work pertaining to the incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to the Registrar of Companies. The fees charged by the Registrar of Companies for the registration and approval of the name are compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, A s recovery of such expenses is a disbursement and not part of the value of supply made by A to B. In the instant case, the expenses towards the travel are n the interest of the client. It is not a pure agent concept. Be that the case, every body will not include many expenses like Hotel bills, Restaurant bills and other expenses incurred by the CA during the provison of the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . - Reply By Ganeshan Kalyani - The Reply = CA should not enjoy the benefit of air travel. He just has to incur the cost. The benefit shall be taken by the client. If this is the case then pure agent concept .works. But the fact is client engages the CA to render service. For rendering the service CA need to travel which is his expense so as to render service. Client is interested in main servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. Client will not enjoy the travel service. These instances does not satisfies the conditions of the pure agent concept. Hence GST is applicable on such reimbursement. Thanks. - REIMBURSEMENT OF EXPENSES ON AIR TICKETS - Query Started By: - ROHIT GOEL Dated:- 24-1-2018 Goods and Services Tax - GST - Got 12 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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