24 April 2016
Finance Bill 2016 has amended section 67 of the Finance Act 1994, by amending the meaning of taxable service. Paragraph 109 of the Finance Bill has provided as follows:
"109. In section 67 of the 1994 Act, in the Explanation, for clause (a), the following clause shall be amended:
‘(a) consideration will include the amount that is payable for the taxable services provided or which is likely to be provided any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such prescribed conditions any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission or the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket."
Therefore all expenses which are in the nature of reimbursement should be included in computing the taxable value of services subject to service tax.
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