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Reimbursement of additional processing charges

This query is : Resolved 

14 May 2020 Dear Sirs/Madams,

>> Suppose there are 3 companies : A, B and C
>> A is a subcontractor for B for which B pays processing charges to A
B sells the finished goods to C
>> On account of the pandemic of Coronavirus, C asks B to pay some "additional/extra"
processing charges to A on equal sharing basis (Additional processing charges shall be borne
by B and C in the ratio of 1 : 1)
>>Suppose A raises a bill on B for additional processing charges of Rs.100 + 5% GST
>>As agreed, B will recover 50% from C. So, in this case, please answer the following:
(1) On which amount 50% shall be computed
(2) Please state the rate of GST (if applicable) which B shall charge on the 50% reimbursement from C
Thanks in advance.

14 May 2020 1 On Rs 100 50% will be claimed with 5% GST. ITC can be claimed on GST payment to A.
2 5% GST to be charged on C.

19 May 2020 Thanks a lot, Sir! I really appreciate your reply.


19 May 2020 One of my friends says 18% GST is applicable on reimbursement.



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