St on reimbursement to directors
This query is : Resolved
04 December 2012
After amendment ST on director fees is Company's responsibility.
The query is whether ST is applicable on the reimbursements like Hotel expenses, travelling expenses claimed by the director ?
All the reimbursements claimed are actual amount spent by director & no addition is made in claim ? Original bills are also submitted by director...
Does it fall under pure agent category ?
or Company has to pay ST on reverse charge basis on the reimbursement amount ?
The query is whether ST is applicable on the reimbursements like Hotel expenses, travelling expenses claimed by the director ?
All the reimbursements claimed are actual amount spent by director & no addition is made in claim ? Original bills are also submitted by director...
Does it fall under pure agent category ?
or Company has to pay ST on reverse charge basis on the reimbursement amount ?
04 December 2012
Hi
NO ST will be applicable if bills are in the name of company to qualify it as pure agent transaction.
Else if bills are in the name of director then company can not claim expenses of amount paid by director & in that case director has to raise invoice in the name of company with ST. Co. can claim cenvat of ST paid to director.
Thanks//Vaibhav
Revert for more clarity.
Use thank button to convey your appreciation.
NO ST will be applicable if bills are in the name of company to qualify it as pure agent transaction.
Else if bills are in the name of director then company can not claim expenses of amount paid by director & in that case director has to raise invoice in the name of company with ST. Co. can claim cenvat of ST paid to director.
Thanks//Vaibhav
Revert for more clarity.
Use thank button to convey your appreciation.
04 December 2012
Thanks Vaibhav.
Kindly check that from 1st Jul 2012 Director is no more liable for ST payment. Service receiver has to pay ST on reverse charge basis.
Bills are in the name of director...
Kindly check that from 1st Jul 2012 Director is no more liable for ST payment. Service receiver has to pay ST on reverse charge basis.
Bills are in the name of director...
04 December 2012
Dear Mr. Vipul,
Service tax is not applicable on such type of transaction.
No service is provided by the directors to the company.
Service tax is not applicable on such type of transaction.
No service is provided by the directors to the company.
04 December 2012
Further, travelling and hotel expenses reimbursed by the company to the directors. wherein Service provider are not the directors but hotel or travel agent etc and service tax, if applicable, already been paid.
no service tax under reverse charge by the company.
no service tax under reverse charge by the company.
04 December 2012
It is already elaborated..
I just want to tell you all services provided by the directors are covered under reverse charge.
Here, what is the service which is provided by the director???
I just want to tell you all services provided by the directors are covered under reverse charge.
Here, what is the service which is provided by the director???
04 December 2012
Mr. Amit,
You mean the below para is not applicable here...
"Where any expenditure or costs are
incurred by the service provider in the
course of providing taxable service, all
such expenditure or costs shall be treated
as ‘consideration for the taxable service
provided or to be provided’, and shall be
included in the value for the purpose of
charging service tax on the said service, if
the expenditure or costs are reimbursed by
the Service recipient."
You mean the below para is not applicable here...
"Where any expenditure or costs are
incurred by the service provider in the
course of providing taxable service, all
such expenditure or costs shall be treated
as ‘consideration for the taxable service
provided or to be provided’, and shall be
included in the value for the purpose of
charging service tax on the said service, if
the expenditure or costs are reimbursed by
the Service recipient."
04 December 2012
These cost & expenditure is not charged by the director but these are charged by the hotel or travel agent who is the service provider.
Directors are not service provider in this case. they are getting reimbursement. The clause referred by you is applicable only for service provider i.e hotel owner etc.
The directors have already paid service tax to hotel etc.
It is purely reimbursement of expenses what is incurred by the directors and no service is provided by the Directors
Directors are not service provider in this case. they are getting reimbursement. The clause referred by you is applicable only for service provider i.e hotel owner etc.
The directors have already paid service tax to hotel etc.
It is purely reimbursement of expenses what is incurred by the directors and no service is provided by the Directors
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