XYZ(India) supplying services of Freight Forwarders / Clearing and forwarding agents and are mainly in providing transportation services in relation to import and export by sea and air. During providing these services, they pay on behalf of their client certain charges to different authorities and then get it reimbursed from their client at actuals. 1) Is XYZ required to pay GST on these charges recovered? If no, are they required to proportionately reverse the input tax credit for common services since not charging GST on reimbursement?
Kaustubh Ram Karandikar Asked question September 22, 2021
Prima facie it appears that reimbursement of expenses are being claimed as pure agent and thus will not be subject to GST. No ITC reversal will also be required.
Team Taxwallah
Frah Saeed Changed status to publish January 23, 2022