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Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2012 We are del credere agent of UB group. We claim re-imbursement of expenses through debit notes against expenses incurred for daily operations besides commission on sale.

whether service tax applies on re-imbursement of expenses claimed ?

CA Suresh Jain

CA Suresh Jain (Expert)
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26 September 2012 Del credere commission agent sells the goods on behalf of the principal and actually stands a surety for recovery of credit extended to customers of the principal. He is liable to send the sales amount after deduction of expenses and his commission to the Principal. In view of this definition the reimbursement of expenses incurred on behalf of the Principal is not taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2012 But sir, as per Rule 7(2) of Service Tax Valuation Rules 2006 only a pure agent fulfilling prescribed 8 (eight) conditions is exempt from purview of S.tax on re-reimbursement of expenses.Can you suggest similar Rule or Act to support your reply, this will help us later.

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