Applicability of service tax on reimbursement of expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 April 2015 Dear all
in respect of work contract the service recipient is providing freight. fuel reimbursement and there is element of profit in reimbursement for SP. please do confirm does service provider liable to charge ST on reimbursement expenses incurred by SP.

please clarify...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 April 2015 To overcome the decision of the Hon’ble Delhi High Court in Intercontinental Consultants, the definition of consideration in Explanation to Section 67 has been suitably amended. Thus, after the amendment there is no doubt that any expenditure incurred by the service provider for providing any taxable services has to be included in the value of taxable services unless specifically excluded and Service Tax would be chargeable on the total value including the reimbursable expenses incurred by the service providers. However, the inclusion of reimbursable expenses for the period prior to the amendment is yet to be decided by the Hon’ble Supreme Court.

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2015 Dear seetharaman sir
i have always been confused about the applicability of service tax on reimbursement of expenses incurred by service provides. but so many tax expert has said no need to charge ST on reimbursement of expenses. i request you to please do clarify in details whether ST is be charge on reimbursement of expenses or not....

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2015 In view of amendment ST is to be charged on reimbursement of expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2015 Dear sir
The ST is to be charged in all condition whether we have claim reimbursement from the SR on the behalf of expenses bill. and also do clarify ST is to be charged on all kind of reimbursement of exp. like petrol, courier, telephone. stationery. travelling etc..

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