GST – Started By: – Kaustubh Karandikar – Dated:- 19-2-2019 Last Replied Date:- 23-2-2019 – XYZ (Client from Delhi) had entered in to a Contract with PQR (a chartered accountant from Mumbai) to carry out audit of their records. As per the contract, the amount payable by XYZ to PQR towards professional fees will be ₹ 100000/- + the amount to be paid towards hotel stay, air fare etc. which will be directly paid by XYZ to hotel and the airlines. PQR is required to pay GST on ₹ 100000/- only or ₹ 100000/- + amount paid by XYZ towards hotel stay, air fare etc. directly to the hotel and the airlines? – Reply By Rajagopalan Ranganathan – The Reply = Sir, As per Section 15 of CGST Act, 2017, the value of a supply of goods or serv
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pply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. Explanation. – For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier
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as follows :- If XYZ has agreed to arrange all the facilities like travelling, accomodation etc. to PQR; then PQR needs to charge GST only on ₹ 1,00,000/- If XYZ doesn't agreed for any such agreement but still he pays from his pocket then clause (b) of sub-section (2) of section 15 comes into effect which says – any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both In this case, PQR has to discharge GST on ₹ 1,00,000 + expenses incurred by XYZ on behalf of PQR. – Reply By KASTURI SETHI – The Reply = GST is payable on 100000/- + Hotel stay, Air fare etc. – Reply
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