Applicability of Service Tax on Reimbursement of Expenses

wef 2006 as per the service tax valuation rules, the value of expenses reimbursed will also be liable for service tax

If expenses is incurred on behalf of the client as his "Pure Agent" and you are not making your own profit on such reimbursement, instead only charging the actual amount, then only service tax will not be charged on the such reimbursement made to you. Provided all the conditions (in Bold) are satisfied.

Please note that reimbursement of expenses are not taxable under the service tax provided the same is on actual basis, reimbursement of expenses is it has to be charged separately in the invoice and the amount of expenditure incurred should be evidenced / supported by the documents