Reimbursement of actual air ticket cost to architech consult

This query is : Resolved

A Noble Student (Querist)
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19 October 2012 Dear Sir,

I request your kind clarification on the following whether attracts Service Tax or Not ?

Reimbursement of Actual Airticket Cost to Foreign Architech Consultant against Invoice raised by the Achitech along with producing the original Invoice as received from the travel agent.THERE IS NO MARGIN ON THE ABOVE REIMBURSEMENT TO Architech.

ALSO PLS NOTE THERE LIES AN AGREEMENT ON THE ARCHITECH FEES AND AN SPL CLAUSE TO DENOTE THE AIRTICKET COST TO BE REIMBURSED SEPERATELY APART FROM THE ORGINAL CONTRACT FEES.

COULD YOU PLS HELP ME WHETHER THIS ATTRACTS SERVICE TAX.

ALSO KINDLY HELP ME WITH THE NOTIFICATION TO SUPPORT YOUR OPINION.

THANKS A LOT !

Regards
Bharath

CA Navin Jain

CA Navin Jain (Expert)
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19 October 2012 if there is a saprate bill of reimburshment th service tax is not applicable.

@VaibhavJ

@VaibhavJ (Expert)
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19 October 2012 Hi,

Service Tax will be charged.

As per notification no. 12/2006 of ST:

Where any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the said service.

There is exemption only to the PURE AGENT.

Please refer notification for clarity.

https://www.servicetax.gov.in/notifications/notfns-2k6/st1206.htm

Rgds//Vaibhav

MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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26 October 2012 Vaibhav is right...Also refer the Service Tax (Determination of Value) Rules for the conditions to be fulfilled in order to treat that the expenditure has been incurred as pure agent...

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