Service tax on reimbursement of expenses

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This query is : Resolved

PANKAJ KUMAR SRIVASTAVA (Querist)

08 June 2017 RESPECTED SIR,
WHETHER SERVICE TAX IS APPLICABLE ON REIMBURSEMENT OF EXPENSES OR NOT ? PLEASE CLEAR MY DOUBT

WITH REGARDS

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

08 June 2017 Budget 2015 has amended section 67 to include reimbursement of expenses in the value of taxable service.

Extract of budget 2015 speech regarding above change:

109. In section 67 of the 1994 Act, in the Explanation, for clause (a), the following clause shall be amended:

‘(a) consideration will include

the amount that is payable for the taxable services provided or which is likely to be provided
any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such prescribed conditions
any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission or the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket.’.

You can read budget speech from this link.- budget 2015 pdf.

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