Service tax on out of pocket expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2012 Respected, My client have received a notice from service tax department. I have submitted the details and he demand the service tax on the bill on which i have charged only my conveyance bill and other expenses. The service tax guy said you have to deposit the tax on the bill of out of pocket expenses.

As i know that, if you issued for you pocket expenses bill on that no service tax will be charged and other party not deduct the tds also.

Is this guy correct or not?
if not then on which section.

Please help

Amol S Joglekar

Amol S Joglekar (Expert)
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07 August 2012 Service tax be paid on this. Income tax TDS is not done on that is on different grounds. 194J speaks about "income" and hence income tax TDS is done on net amount. But service tax needs to be paid on that.

Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2012 Thank for reply. It means we have to deposit the service tax on conveyance and other expenses which we paid on behalf of client. Along with interest .

Amol S Joglekar

Amol S Joglekar (Expert)
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08 August 2012 Yes. this contention is dropped out by the new negative list in indirect manner.

Querist : Anonymous

Querist : Anonymous (Querist)

09 August 2012 Thanks once again. as above you mention this contention is droped out by the new negative list in indirect manner. but my query belongs the period between the year 2008 to 2010. still i have to pay ? any section for this ?

Amol S Joglekar

Amol S Joglekar (Expert)
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09 August 2012 unfortunately no such contention for the earlier period.That was a gray area.

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