Details not found.
GST : GST is levied on reimbursement of expenses from lessee by lessor at actual Applicant is engaged in business of exhibition and business services, accommodation in hotels, inn, guest house, club or camp site, etc services, and restaurant services. It intends to enter in to a contractual agreement of renting of immovable property with lessee for leasing of immovable property for rent. Apart from rent, E-Square also plans to collect expenses of electricity, water charges, property tax and cooking fuel from lessee
• Further, aforesaid electricity, water charges, property tax and cooking fuel are expected to be recovered from lessee at actual in accordance with contractual agreement.
• Lessor has fixed value of renting of property by way of contractual agreement between them. Apart from that, whatever expenses incurred are recovered at actual (i.e. apportioned on basis of usage as may be agreed) hence could vary from month to month. Given this, it could be construed that there is no supply of goods or services from lessee to lessor.
• Applicant submits that as per Rule 33 of CGST Rules, 'Determination of Value of Supply Rules', reimbursements are not liable to GST if same are incurred in capacity of 'pure agent'.
• In view of above, applicant has sought Advance Ruling on following issues:
• From terms of agreement and transaction, it is found that there is no authorization, obtained by applicant from recipient of the services, to act as pure agent and to make payment to third parties.
• In view of above, it can be said that applicant has failed to establish themselves as a pure agent as defined under GST Valuation Rules and therefore expenditure or cost incurred by applicant and subsequent reimbursement thereof cannot be excluded from value of supply.
•Thus, it is ruled that