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Valuation of Taxable Service

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Querist : Anonymous

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Querist : Anonymous (Querist)
10 October 2010 What will be the value of Taxable Service:-

1. Mr. X, a Professional provides service to a Company. He incurrs Rs. 10,000.00 towards Travelling Expenses, which has been paid by the Company.

Mr. X raises a Bill of Rs. 50,000.00 for his professional services.

On what amount should Mr. X charge Service Tax?
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
10 October 2010 Rule 5(1) of the Service tax (Determination of Value )Rules,2006 says as follows:-
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.
In view of the above, ST is to be levied on Rs.60,000/-.
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