Freight, rcm & reimbursement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 June 2018 Dear Experts,
As supplier we have paid the freight Rs. 2300/- on the behalf of our buyer on sale. However buyer will reimburse the freight amount to us. Pls clarify :- in this scenario who is liable to pay Tax under RCM and who will claim ITC?

Thanks
Mukul Gupta

Ketan Samdani

Ketan Samdani (Expert)
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26 June 2018 Your buyer shall be liable to pay GST under RCM since the charge of freight will be reflected in their P/L A/c/. Your account will be squared off on reimbursement of expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2018 Sir. I think as per the GST rule freight payer will pay the Tax under RCM . however by following the accounting treatment since the actually cost of freight will be borne by buyer therefore buyer can claim the ITC,

Pls clarify.. Is it correct

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Ketan Samdani

Ketan Samdani (Expert)
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27 June 2018 Buyer will have to pay GST and subsequently claim its ITC.