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Service tax on reimburshment of expenses

This query is : Resolved 

21 May 2012 Dear Experts,
Is service tax leviable on reimburshment of expenses incurred on account of diesel expended on our behalf???

the party is claiming the payment on actual basis...

Please mention section/case law if any, applicable to this..

Thank You
Arijeet

22 May 2012 Normally all the expenses incurred while providing the service would be includible in the gross value.
Reimbursements are only deductible when they are not part of the activity and indpendent of the taxable activity + comply with the service being provided as pure agent and conditins thereto as set out in Rule 5 (2).


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