Service- tax

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RAMESH SARAVANAN BM (Querist)

21 December 2015 Service Provider charged service tax for service value and other reimbursement expenses. Pls advice service tax is applicable for reimbursement expenses like travel and boarding. The Value of reimbursement seperatly mentioned in bill.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

22 December 2015 Service Tax has to be charged on reimbursement of expenses also.

IN the Finance Bill 2015, the Explanation to Section 67 - Clause (a) has been substituted. As per the new amendment, all reimbursement expenses incurred by the service provider, have to be included in the consideration.

The amendment is as below:

'(a) "Consideration” includes–

(i) any amount that is payable for the taxable services provided or to be provided;

(ii) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed;

(iii) ............................................'

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