Tax on Out of Pocket Expenses

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This query is : Resolved

Nitin Panthri (Querist)

08 April 2009 hi,
Pls tell me whether service tax is charged on out of pocket expenses made on clients..as conveyance, etc..

Regards,

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

08 April 2009 Yes. If is part of their bill then service tax is automatically chargeable. If they are claiming as a reimbursement which is actual then service tax is not applicable.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

08 April 2009 ST is chargeable on the gross amount charged for the service.

The method of billing may not be the reason for exclusion.
The ST determination of Value rules require that all expenses / costs recovered would form part ofthe value.
The exception is if one were a pure agent and the conditions under Rule 5(2) are met. The conditions whether being met maybe confirmed.

Nitin Panthri

Nitin Panthri (Querist)

08 April 2009 Thanks for removing my confusion i was in confusion for many days....

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