GST Liability on Expenses: A Quick view

As we all know that from 1^st July 2017, GST is payable on sales made by trades, manufactures etc. However, do we know that GST is also payable on expense incurred by the assessee. Here we are discussing the related provisions in brief:

Liability under GST:

Case I. Simple to understand that in case any supplies are made the supplier is liable to pay GST and get it recovered from the purchaser.

Case II. Here, an attempt is made to recover the taxes from the purchaser in case supplier is not liable to pay the GST as his turnover is below Rs 20 lacs.

Points to be considered:

1. Whether GST is liable to be paid on the expenses under GST law?
2. If yes, whether GST is paid by the supplier of goods and / or services?
3. If GST is not paid, find out the HSN code and rate of GST based on the classification criteria of the goods and / or services received and consumed by the receiver registered person? Raise invoice on himself of the taxable amount and tax value of the respective goods?
4. Pay the tax liability on the above tax invoice?
5. Find out whether GST is paid above is also available as input tax credit (ITC) or goods and / or services falls under section 17(5)?
6. In case goods / services under question falls under section 17(5) input tax credit will not be available irrespective of the fact that GST is paid by supplier or receiver?

Read Here: List of Expenses of Profit & Loss A/c comes under GST & related provisions.

GST on Expenses (PDF)

GST on Expenses (Excel file)