TMI BlogGST on reimbursementsX X X X Extracts X X X X X X X X Extracts X X X X ..... Company A is based in India and sells the products in India to customers These products imported from its Parent B located in USA Company A incurs marketing and advertising expenditure and this expenditure is reimbursed by Parent company B ( ie back to back reimbursement) Query: Will the reimbursement of marketing and advertisement expenses received by Company A in India from its Parent B Loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in USA liable for GST in the hands of Company A - Reply By Rajagopalan Ranganathan - The Reply = Sir, Marketing and advertisement expenditure are includible in the value of service provided provided.Therefore gst is payable on such reimbursements since the same will form part of consideration received for selling the products pf B by A in India. - Reply By KASTURI SETHI - The Reply = I am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also of the same view as opined by Sh.Ranganathan Sir. - Reply By Madhavan iyengar - The Reply = Renganathan sir and kasturi sir Thanks additional points to be considered is if the indian company is not able to recover the marketing cost locally ie it is selling at a lower price due to market constraints so taxable value will be lower and since in gst it is transaction value there wont be any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions on value at which tax is discharged so in above case will the reimbursements taken for marketing expenses from parent have any implication on gst - Reply By KASTURI SETHI - The Reply = Sh. Madhavan Iyengar Ji, In my view, Scehedule-I is here applicable. The words, not able to recover has no place. - Reply By Madhavan iyengar - The Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y = kasturi sir The Reimbursements taken from the parent is a back to back costs so under which head will it be taxable since there is no underlying supply between indian company and its parent foreign company it is only reimbursement of costs which is being reimbursed the services was firstly procured by indian company for its business and now it is only getting a reimbursement from the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign parent company kindly give your views - Reply By KASTURI SETHI - The Reply = Dear Sir, You have said, The products are sold in India . Thus marketing and advertisement services are being provided in relation to the said products. These are consumed in India. Pl. see Section 13 (6) of IGST Act in this context. - Reply By SUSHIL BANSAL - The Reply = Sir, In my view incurring expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses claiming the same amount from Co. B is a pure agent relationship and hence there is no GST implications. - GST on reimbursements - Query Started By: - Madhavan iyengar Dated:- 22-10-2020 Goods and Services Tax - GST - Got 7 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentindia.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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