Service tax applicability on reimbursement of amc charges.
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 February 2017
If a company(Subsidiary) using premises of their Holding Company. The AMC charges like building maintenance , lift maintenance , security etc. are borne by Holding company and the bills are also in the name of Holding company, now if the subsidiary wants to borne the expenses their part and whether service tax will be applicable on this or not.
For e.g. if the total bill is 700000 Service tax 105000 the whole amount is paid by the Holding company to the service provider , out of this 200000 ST 30000 is the part of subsidiary company. If the Holding company claims 230000 from the subsidiary what would be the implications of Service tax in this case.
1. Can Holding company charge separately service tax amount in the reimbursement of 230000 as they are not the service provider here.
2. Can holding company treat the whole amount as reimbursement?
For e.g. if the total bill is 700000 Service tax 105000 the whole amount is paid by the Holding company to the service provider , out of this 200000 ST 30000 is the part of subsidiary company. If the Holding company claims 230000 from the subsidiary what would be the implications of Service tax in this case.
1. Can Holding company charge separately service tax amount in the reimbursement of 230000 as they are not the service provider here.
2. Can holding company treat the whole amount as reimbursement?
Expert : Anonymous
Expert :
Anonymous
(Expert)
09 February 2017
I would suggest great subsidiary a debtor for INR 2.3 lakhs
Subsidiary debit 2.3
amc expense debit 5
service tax debit .75
to cast 10.50
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