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Discussion > Service Tax > Notifications >

Applicability of Service Tax on Reimbursement of Expenses

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[ Scorecard : 33]
Posted On 13 January 2011 at 16:02 Report Abuse

Dear All,

 We are providing consultancy services to the client, we raised the bill with service tax, we also raised bill without service tax for reimbursemt of out of pocket expenses. my point is whether reimbursement of expenses is liable for service tax or not.

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Vivek Raju P

[ Scorecard : 610]
Posted On 13 January 2011 at 16:06

wef 2006 as per the service tax valuation rules, the value of expenses reimbursed will also be liable for service tax

Sonam Bidasaria

[ Scorecard : 765]
Posted On 17 January 2011 at 22:57

If expenses is incurred on behalf of the client as his "Pure Agent" and you are not making your own profit on such reimbursement, instead only charging the actual amount, then only service tax will not be charged on the such reimbursement made to you. Provided all the conditions (in Bold) are satisfied.

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Executive Accounts

[ Scorecard : 136]
Posted On 03 February 2011 at 10:45

Please note that reimbursement of expenses are not taxable under the service tax provided the same is on actual basis, reimbursement of expenses is it has to be charged separately in the invoice and the amount of expenditure incurred should be evidenced / supported by the documents

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