St on reimbursement
This query is : Resolved
02 January 2016
a company is in trading business, it reimburses certain expenses like packaging charges incurred on behalf of party from which goods are purchased.Whether st is applicable on the same since the budget has included reimbursement in definition of consideration..However it is to be noted that it is not a service provider as mentioned in definition.
CA R SEETHARAMAN
(Expert)
03 January 2016
In such a case service tax not applicable treating it as pure agent.
03 January 2016
As per�Explanation to Rule 5,the pure agent should neither intend to or hold�any title to the goods or services so provided as an agent of the client, however in this case the goods are purchased.. hence the company is not to be treated as pure agent.. so what will be the applicability as regards st
CA R SEETHARAMAN
(Expert)
03 January 2016
The company is a trader not service provider so as per Rule 5(1) service tax applicable on such expenses incurred by service provider.
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