Point of supply, Goods and Services Tax - GST

[sonam sarvaiya]

Dear Team,

I have some querries related to reimbursement of expenses -

01) How do I show the reimbursement of expenses received from foreign clinet in INR in GSTR -1 means B2B or B2C?

02) what is the point of supply, if expenses done in foreign contries. For example - I have a client from Hong Kong. My employee went to HK for 10 days. We have reimbursed whole amount including Flight tickets from our HK client and issue him a reimbursement invoice what should be the POS in this case.

03) If I show point of supply in india then which state I have to show as point of services because we have three office - Mumbai, Chennai and Gurgaon.

Please guide me.

Posts / Replies

[Dhruv Dedhia]

Section 8 of CGST Act states that a composite supply comprising two or more supplies, one of which is a principal supply shall be treated as a supply of such principal supply.

Expenses for traveling and others would be incurred for providing principal supply which would be composite to such reimbursement of expenses. POS shall be determined based on the principal supply and not on the reimbursement of expenses.

Answers to the question stated

1. It would be treated as B2C as a recipient would not be registered in India.

2. POS shall be determined based on principal supply.

3. to be determined based on the facts.

[sonam sarvaiya]

Dear Sir,

Many thanks for your reply.

I still have a doubt in POS - As you had mentioned above that, POS in case of composite supply is determined based on principal supply.

In practical scenerio our employee vistied Hong Kong for the annual meeting (as required in contract that contractee should visit the HK once in a year for annual meeting with client) so in this principal supply is client meeting and meeting held in HK then what is place of supply? Whether it is mumbai or other place because in B2C transactions there is POS field is mandatory to mention. Please guide me.

Thanks for the support!

[KASTURI SETHI]

Point-wise reply is as under:-

1. B2B

2. It is not export. Place of supply is in India as your employee is representing you in a foreign country and undoubtedly for and on behalf of your firm.

3. Principal place of business mentioned in the application for registration (while apply for registration) should be shown as place of supply.

4. There is no term like point of supply in GST.

5. Such expenses must be included in the transaction value for the purpose of payment GST.

[sonam sarvaiya]

Thank you sir for your reply.

1) Can explain me how it will be treated as B2B?

Thanks for your support!

[sonam sarvaiya]

Apologies for the above post.

My queries is that - Why this is treated as B2B instead of B2C because my client doesn't have GST registration in india.

Thanks for the support!

[KASTURI SETHI]

Non-registration does not qualify as B 2 C. There are other factors also to be considered. Pl.let me know nature of your business and constitution of your firm. Is there any agreement with your client in a foreign country ?

[sonam sarvaiya]

Dear Sir,

Thank you for your reply.

Informations required by you are as below -

- Nature of Business - Mangement Consultacy and Market Research

- Constitution of firm - We are Pvt.Ltd. Company

- Yes, We have contract for above services (As per contract we have to visit Hong Kong once in a year for annual meeting with our client).

Thanks.

[Ganeshan Kalyani]

What is the treatment you are giving to your main service i.e. management consultant market research?