Hello, I am render software technical consultancy from my proprietorship to foreign clients, primarily from Singapore I am filing GST invoices for all consultancy fees... Occasionally, I need to travel on behalf of the client. In such cases, I first incur expenses from my own pocket and than claim reimbursement for the same from the client (on actuals). DO I need to file an invoice for the reimbursement of expenses also in the GST portal?
also I file my income tax under 44ADA. Would that invoice for reimbursement have to be added to gross receipts for calculating tax due under 44ADA?
Yes.. under GST valuation rules, you cannot exclude expenses reimbursed unless you are a pure agent of the service receiver. In this case you should issue invoice for reimbursement of expenses and this forms part of your gross revenue under GST.
From income tax point of view these need not be included under income.
No, you don't need to file pure reimbursement invoice in GST portal.
No, it should not be added for the purpose of section 44ADA as well.
No...reimbursements need not be added to the gross receipts and the same should not be filed in GST portal.
Regards
Dear Sir,
- Service rendered by you falls within the ambit of export of service. You need not to collect GST from the clients. Either you obtain LUT or pay GST and claim refund afterwards.
- Whether you are showing reimbursement separately as a component or not in the Invoice apart from principal service provided by you, you are liable to show them as per valuation rules.
- Under Income tax, definition of turnover does not include reimbursements if proper demarcation is adopted in invoicing and that should be consistent on year to year basis.
Thanks
Hi,
Reimbursement of expenses does not attract GST.
Note that you cannot claim ITC on the same as well.'=
Since it is reimbursement,you don't have to file an Invoice on GST portal.
Hi,
As the amount received is in nature of reimbursement, it does not a part of your turnover.
Hence there is no need of adding it to your gross receipts.
Hope your queries are resolved!
Dear Abhishek, Nikhil, Siddhant, There is a uniformity of opinion here that reimbursement of expenses need not not to added up for 44ADA purposes. Could you offer some reference to backup your position that pure reimbursement invoices need not be filed at the GST Portal. This is because Meera and Vivek, seems to feel such invoices need to be filed under GST. Also do you have any suggestion of hoe to name the invoice e.g. "REIMBURSEMENT INVOICE for ACTUAL EXPENSES INCURRED" Thank you, Sumeet
Sir, what I have observed is usually you add a description in the invoice "reimbursement of expenses" and will be billed along with the consultancy fees.
Hi Sumeet
For Income tax purposes under section 44ADA, you need not include the reimbursement of expenses in your gross receipts.
For GST, it is a disputed position. There are conflicting valuation rules. As general rule, the reimbursement of expenses are to be included in the turnover. However, reimbursement of expenses to 'pure agents' are not included.
It is advisable to include the reimbursement of expenses for GST purposes because anyways being export of services, no GST is applicable. However,the turnover under GST and IT will conflict due to such action.
Hi,
It is advisable to include the reimbursement invoices on GST portal so that turnover under GST and Income tax should match.
Thanks
No need to make separate invoice for reimbursement,just bifurcate the same in consultancy invoice itself.
Since it is reimbursement,you don't have to file an Invoice on GST portal.
You can mark the invoice specifically as "reimbursement of expenses incurred"
Hope that clarifies
Dear Sumeet,
Hope you are doing well !
Reimbursement of expenses does not attract GST.
Since It is reimbursement,you don't need to include in gross receipts and also you don't have to file separate Invoice on GST portal.
Thanks & Regards,
Payal Chhajed
Dear Sir,
You don't need to include reimbursement of expenses in gross receipts.
Reimbursement of expenses does not attract GST. Also, you can not claim ITC on the same.
