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TMI BlogAmount paid on behalf of related partyX X X X Extracts X X X X X X X X Extracts X X X X ..... 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 SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THI - 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) . Moreover XYZ is working for and on behalf of related parties and XYZ can be termed as 'intermediary'. - Reply By DR.MARIAPPAN GOVINDARAJAN - The Reply = I endorse the views of Shri Sethi. - Reply By KASTURI SETHI - The Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y = Sh.Govindarajan Ji, Thanks a lot for support, Sir. - Reply By CASusheel Gupta - The Reply = In this case, XYZ is making payment on behalf of related parties and their account is debited. It can be treated as loan to related party and consideration shall be in the form of interest on loan, which is exempt from GST. - Reply By KASTURI SETHI - The Reply = D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear Sh.Sushil Gupta Ji, Agreed with your view regarding the aspect of 'interest' but what about the activity/role of 'intermediary'. Will you please 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'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 third parties. - Reply By KASTURI SETHI - The Reply = O. K. Sir I agree with you. - Amount paid on behalf of related party - Query Started By: - Kaustubh Karandikar Dated:- 27-11-2018 Goods and Services Tax - GST - Got 7 Replies - GST - Discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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