Reim of Expense

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Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2010 Pls advice me . can service tax applicable in Reimbursement of expense.. urgent reply

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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10 August 2010 If bill is issued by the service provider to any person for reimbursment of expenses then service tax will be applicable. However, if reimbursment is provided by the employer to the employee then Service tax is not applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2010 at which section or rule. it is written pls advice

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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10 August 2010 In case of employer and employee there is no service which is provided so service tax is not applicable. However, when reimbursment of expenses is claimed from the client then it is claimed for service provided and hence service tax is applicable.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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10 August 2010 Service tax is applicable on reimbursement of out of pocket exp or other exp , which necessarily are part of main service contract.

But, service tax tax will not be applied on reimbursement of pure exp incurred on behalf of the client.

Example : CHA charges to the client in some different heads like... postage / documentation / custom duty paid / Airport Authority warehouse charges etc.

In this case... Postage / documentation will be included in the service tax calculation whereas... custom duty / Airport Authority warehouse charges will not be included in service tax calculation.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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10 August 2010 Please see rule 5(1) and 5(2), along with the four illustrations given thereunder, of
Service Tax (Determination of Value) Rules, 2006

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