Service tax on reimbrusement
This query is : Resolved
09 April 2009
If a reimbursement of out of pocket expenses is made under a service contract, can service tax be charged on that. Please mentioned relevant law or notification
10 April 2009
Dear sumit reimbursement of out of pocket Exp is not under the service tax hence neither service tax sud be charged.nor tds is deducted through it.
10 April 2009
Reimbursement of out of pocket expenses is part of service and is part of taxable service. And hence service tax is chargeable.
However,Often, a service provider incurs some expenditure on behalf of service receiver and then recovers the amount from him. Such expenditure is not part of service provided by him to service receiver, but is incurred by him as per business practice or convenience.
Rule 5(2) provides that the expenditure or costs that a service provider incurs, as a pure agent of the client, shall be excluded from the value if such service provider fulfils prescribed conditions.
However,Often, a service provider incurs some expenditure on behalf of service receiver and then recovers the amount from him. Such expenditure is not part of service provided by him to service receiver, but is incurred by him as per business practice or convenience.
Rule 5(2) provides that the expenditure or costs that a service provider incurs, as a pure agent of the client, shall be excluded from the value if such service provider fulfils prescribed conditions.
10 April 2009
View of Vanita Rathi seems correct. For further details pl refer rule 5(2) in the following link https://www.servicetax.gov.in/value-rules.htm
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- Taxable or Tax exempt
- ITDS U/S.194T of Firm
- NRI starting business in India
- ADVANCE PAYMENT OF ADVOCATE
- TDS ON EMAIL DOMAIN SERVICE BILL
- Capital gain on sale and purchase of plot
- Eway bill not cancelled within 24 hous what can be due
- EXPORT COMMERCIAL INVOICE HSN CODE
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
