Reimbursement of expense under GST if Bill in name of employee : ICAI raised issues

By | October 3, 2017
(Last Updated On: October 3, 2017)

Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

Law Related Issues

14. Reimbursement of expense for which invoice is issued in the name of employee

As per Schedule III of the CGST Act, 2017 services by an employee to the employer in the
course of or in relation to his employment are treated neither as a supply of goods nor a
supply of services.

Issue
There may arise many instances wherein an employee is reimbursed by his employer for
expenses incurred by an employee during course of employment but for which a bill is
issued in the name if the employee. For example. Mr. A hires a cab while on a tour for
company work and makes the payment for the same. The bill is issued in name of Mr. A
and company reimburses the amount so borne by Mr. A. This reimbursement is not a part
of Mr. A’s salary. The taxability of such transactions need to be clarified.

Suggestion
It is suggested that there be provided a suitable clarification regarding taxability of
reimbursements made by an employer to the employee when the bill for a service etc. is
issued in the name of that employee.

Read Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

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