Rework on goods subject to GST?
A buy some goods from B vendor but the few of the goods is not functioning thus rework is done by A itself. Therefore, A will charge back the cost to B vendor.
A. Is this charge back to B subject to GST?
- B is local vendor
- B is foreign vendor
B. What tax code to use for this trancsaction when capture in system?
This is kind like a compensation (Reimbursement).
Under the DG decision 5, reimbursement is a supply. In this case, the supply is the service of the rework, it will be incurred GST on this, no matter B is local or foreign vendor as the service is done locally. The tax code should be SR.