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Priya Kanoria (Querist)

03 January 2014 Employee picks up foreign currency from Exchange Dealer. Company pays Exchange Dealer for the same. Is the amount to be paid treated as " Reimbursement of expense" or should service tax be charged on the same.
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Nikhil Kaushik

Nikhil Kaushik (Expert)

03 January 2014 if the money picked up by the employee is for company purpose, then 1, it is not an expense anyways as you just have converted on one currency to another.

2. since it is not an expense, it is not reimbursement of expense.

service tax is to be charged by the exchange dealer for his services. his charges shall be considered as expense and if service tax is levied, the same needs to be paid.

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Priya Kanoria

Priya Kanoria (Querist)

03 January 2014 Another question:
If the invoice shows Rs. 10000(say) as paid to exchange dealer and Rs. 10(say) as transaction fee then service tax is to be charged on which figure. Also will tds be deducted on entire invoice amt. or just the srvice part.

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 January 2014 should only be on the service part.

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