Hi Members..
Whether mere recovery of expenses can be treated as service?
I mean, in case of group companies, the expenditures are normally shared by them. Initially, an expenditure may be incurred by one company, which it may later on recover from the other group company..
In such case, there is no underlying services rendered by any company, but only a reimbursement (or recovery) of expenses..
Whether even such reimbursements attract service tax? If so, under what service?
Thanks in advance..
No..it doesn't attract Service Tax since it is a mere re-imbursement of expenses.
But if one company has paid to the party certain amount inclusive of service tax, then it can charge the other company an amount equivalent to the amount paid by it on behalf of the other.
No Service Tax on recovery of expenses as it is a form of reimbusement of expense and it does not attract service tax provided seperate bill of reimbursement is provided for the same
Regards Akash.
CAclubindia
