We raise bill to party for repiring of machine by our engineers, also we are taking rembursement of travelling & lodging of engineers at actual supported by respective bills.
Wether we make seperate bill for service charge and rembursement of expensess or we can make a consolidate bill and charges service tax on total amount.
28 March 2009
If you are charging the expenses actual exactly ie like re-imbursement then service tax need not be charged.
But if you are charging like adhoc or total say re-imbursement of expenses 5000 without giving the details then service tax is chargeable.
Same bill or different bill will not make difference.
But care should be taken that to reduce service tax you should not reduce the charges and increase the expenses abnormally only actuals has to be recovered.
28 March 2009
From above i have conclude that one invoice i have to raise and charge service tax on service charges only and not on reimbursement of expensess.
28 March 2009
Any amount received by a service provider from service receiver would be treated as reimbursement only when the liability for payment towards such expenditure is of the service receiver.If in respect of any expenditure or cost, the service provider himself is liable for making payments thereof, then, irrespective of whether he recovers the payments made towards those expenditure from the service receiver, these payments would constitute a part of the value of taxable service and no deduction would be allowed in that respect. Further section 67 has been substituted w.e.f 18/4/2006 and specific provisions have been made dealing with the treatment of expenditure or cost reimbursed by the receiver to the service provider. More over Service Tax (Determination of value) rules,2006 with particular reference to rule 5(2) has also to be looked into. Therefore, the above aspects had to be carefully followed before taking a final decision on the matter raised in the query.
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