Service tax on per-diem and expense reimbursement

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anoop (Querist)

14 September 2012 Ours is an IT Company functioning in SEZ.For consultant deputed to client place we pay them per diem and also reimbursment of expenses whichis recovered from client later.Should we collect service tax from the client on such per-diem and expense reimbursement billed?

Amol S Joglekar

Amol S Joglekar (Expert)

14 September 2012 Does your SEZ fall in the exempt category of Service Tax? if yes, then you need not.

CA.Vinita Gupta

CA.Vinita Gupta (Expert)

14 September 2012 Can you specify the nature of Reimbursement, is it conveyance

Please also specify if the Consultants are on Payroll.

The Reimbursement of expenditure incurred on behalf of the employer in course of employment would not amount to a service per se and hence not taxable.

anoop

anoop (Querist)

14 September 2012 The Consultants are on the payroll of the Company.Also the Company is billing the client for reimbursment of expenses incurred by its employees.So I presume it cant be exempted under the employer-employee relationship.

CA.Vinita Gupta

CA.Vinita Gupta (Expert)

14 September 2012 Yes as per my views its not taxable

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