service tax

This query is : Resolved

mangesh (Querist)
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01 July 2010 we hire engineering service for inspection purpose,we call from chennai to nagpur,his service charges Rs 100000/- and his traveling charges Rs 50000/- his submited the bill for Rs 150000/- + service tax on rs 150000/- my question is shall we pay serivce tax on rs 150000/- or on serice charges rs 100000/-

Shyam Lal Naik

Shyam Lal Naik (Expert)
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01 July 2010 Reimbursement of expenses on actual basis is exempted only if incurred as a pure agent, ie. on behalf of the service receiver.

From the facts, the expenses are not incurred as your agent.

In my view, you shall pay service tax on Rs. 1,50,000/-

HARIHARAN KRISHNAMURTHY

HARIHARAN KRISHNAMURTHY (Expert)
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01 July 2010 Dear Mr. mangesh,

My response is given below :

The would be classified under the category " consulting engineer " services.

(105)
"taxable service" means any service provided or to be provided :
( inter alia)

(g) to any person, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering including the discipline of computer hardware engineering.

Service tax is payable on the gross amoutnt charged by the service provider.
In this case if he is charging INR 150,000/- as the service charge then servie tax is payable on the total amt.

Hence TDS is also deductibel on the total amount without separating the reimbursement towards transportation ( since separate bill is not raised by the service provider).