Reimbursement of service tax

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vvrravindra (Querist)

14 June 2009 Dear sir

We were awarded a contract and in this connection we have sub-contracted certain works to NRI company. On the payments made to the NRI (sub-contracted) we have paid service tax on reverse charge mechanism. The person who had awarded the work had reimbursed the payment of service tax made by us on the NRI payment. Our claim is as per the contractual provisions. Whether there is any mistake in our claim. Can law prohibits such reimbursement claim because it is service tax paid on the input service.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

14 June 2009 Question not so clear as to who is to avail the credit.

I am not sure that ST on reverse charge basis under the rules of 2006 is required to be paid for reimbursements.

However the credit shouldbe admissible as input services.

Parveen Bansal

Parveen Bansal (Expert)

17 June 2009 Re framed question could be:

In case:

1. Service tax has been deposited for NRI sub-contractor by a company and
2. reimbursement has been claimed for service tax deposited from main contractor

Whether input credit for such service tax can be claimed by company?

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