Hirirng of manpower

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This query is : Resolved

Varun Sharma (Querist)

18 July 2013 We have hired Service Personnel from CISF(Govt. Agency) and 12.36% Service Tax in lieu of Petty Expenditure incurred by CISF and reimbursed by us.
Whether Service Tax is leviable on such reimbursement?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

18 July 2013 ser tax is not applicable on reimbursment of exp.

Ganeshbabu K

Ganeshbabu K (Expert)

18 July 2013 1)Service Tax on Manpower Recruitment Agents shall be the gross amount charged to the client for services rendered, excluding he amount incurred by the manpower recruitment agency on behalf of the client towards expenses which are reimbursed on actual basis.

3)Please note service tax is not applicable only if the amount expensed is on behalf of you for providing taxable service if it fails service tax is applicable.

4)When Service Provider incurrs certain expenses on behalf of Service Receiver and getting reimburshement from Service Receiver, such expenses does not form part of taxable services and not liable to Service Tax. Only thing is that it needs to be mentioned in the invoice that it is a reimburshement of expenses incurred on behalf of Service receiver

So there will be a responsibility to prove that amount paid was re-imbursment of "expenditure incurred on behalf of client"

Thanks & regards
Ganesh babu k

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