Amount paid on behalf of related party
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 27-11-2018 Last Reply Date:- 3-12-2018 Goods and Services Tax – GST
Got 7 Replies
GST
XYZ is making payment to various parties on behalf of the persons / entities which are related to XYZ. The amount so paid is debited to the respective person / entities account. This being paid on behalf of related parties; will it amount to rendering service to related parties and XYZ will be liable to pay GST on it even if no consideration is received from related parties?
Reply By KASTURI SETHI:
The Reply:
Answer is 'yes'.This activity is in the course or furtherance of business. Hence covered under Serial No.2 of Schedule-1 (Section 7).
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ease throw light on this aspect ? Thanks a lot.
Reply By CASusheel Gupta:
The Reply:
Kasturi Sir
Definition of “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.
In this case XYZ is not facilitating the supply of goods/services. Instead his role comes after the supply has already been made. Further, intermediary supplies his services, doesn't lend. In this case, XYZ is actually lending money to his related persons and on the instructions of these related persons payment is made to
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =