Petty Cash Expenses Incurred on Behalf of Principal, Goods and Services Tax - GST

[KUMAR Narasimhan]

Dear Sir / Madam,

An Agent made the Petty cash expenses (Like Tea Expenses, Auto Expenses, Printing and Xerox) and claimed it as reimbursement from Principal.

Question

a) Agent can show this reimbursement expenses as an Exempted Sales and process the same in GSTR-1? Please clarify

b) Agent pays the payment on behalf of Principal, but the Vendor would have raised the Invoice in the name of Principal company. Can Agent raise a reimbursement Expense for the payment made and show this as Exempted sales? Please clarify

Posts / Replies

[Ganeshan Kalyani]

Sir, refer Rule 33 for value of supply of services in case of pure agent.

[KASTURI SETHI]

Dear Kumar Narasimhan Ji,

Yes. Sh.Ganeshan Kalyan Ji is right. Go through the definition of 'pure agent' under Rule 33 of CGST Rules. Do you qualify for the parameters of pure agent ?

I am waiting for your reply and, thereafter, I shall post detailed reply.

[KUMAR Narasimhan]

Dear Mr Kasturi Sethi Sir and Mr Ganeshan Kalyan sir,

Thank you for the information.

Yes sir, he is a pure agent doing service activities for the Principal business person and he is not doing any additional business.

[Shilpi Jain]

In case of pure agent reimbursement, it will not be part of revenue in the Financials and this is not required to be disclosed in the returns as well.

[Ganeshan Kalyani]

Thank you Sri Kasturi Sir. I agree with the views of Shilpi Mam that since this is only a reimbursement (hope that pure agent parameter is fulfilled) this will not form part of turnover for a pure agent. Hence, no need to furnish it in GST return.