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Service Tax Credit of Reimb. of Exp

This query is : Resolved 

Can we get credit of service tax for the expence which we reimburs to our contractor?

As per the contract we gave them assurance for such payment

my email add : adthakkar@vvn.elecon.com


Clarify your query.

Can we get credit of service tax for the expence which we reimburs to our contractor?

As per the contract we gave them assurance for such payment

For payment of Excise can we get credit of above service tax ?


The conditions for availing Cenvat credit of service tax are as follows:

1) The invoice should be in your (Company/firm/individual) name stating separately service charges, service tax, service tax regn. number etc.

2) The services has been consumed towards providing taxable services on which sevice tax is applicable or in manufacturing goods on which excise duty is applicable.

If both the conditions are fulfilled, you may avail the cenvat credit of service tax.


Hi Ashish,

Just to clarify ur point, Service Tax is not charged on re-imbursement of expneses.

To Srinatha Sir,

As a mfg co we can get credit of service tax of excise payment

We have some fabricator contractor in company. some emps. are working under them

As per the contract, we have assured them to reimbers the insurance premium of emps.

Insurance company provied service bill to our contractor i.e. Bill In the name of Contractor. insurance company charged service tax in their bill.

Our contractor put the bill for reimbers the above exp with the final figer

So My Q. is that Can we get credit of the service tax which charged by insurance company?

To Srinatha Sir,

As a mfg co we can get credit of service tax of excise payment

We have some fabricator contractor in company. some emps. are working under them

As per the contract, we have assured them to reimbers the insurance premium of emps.

Insurance company provied service bill to our contractor i.e. Bill In the name of Contractor. insurance company charged service tax in their bill.

Our contractor put the bill for reimbers the above exp with the final figer

So My Q. is that Can we get credit of the service tax which charged by insurance company?

Any amount charged as reimbursement by the contractor will be subject to levy of service tax as it is in relation to providing the services.

The concept of reimbursement has been done away with, in view of the new Valuation Rules, 2006 w.e.f 18/04/2006 which state that value shall be the gross amount charged for the service

The service provided by the contractor ,if is in relation to the dutiable goods manufactured or notified taxable services provided then you can avail the credit of service tax so charged by the contractor

You cannot avail the credit of the service tax charged by the insurance company as the insuree is the contractor and not your goodself. Also the policy is in the name of the contractor

As per provisions of the Rule 4 you will not be eligble however the contractor can avail the benefit of the same.

You are eligble for the service tax charged by the contractor on his invoice on account of reimbursement of insurance charges.

Hope this clarifies your query

should there be a need for any additional clarification do let me know.


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