Reimbursement

Queries 637 views 8 replies

01. Container Cargo movers Service Provier's invoice covers 95% reimbursement and only 5% Service charges (Their income). Hence they are charging Service Tax on the 5% (Service Charges).

02. The reimbursements are in four heads ie Shipping Freight 70%) Transport (10%), Loading & unloading (3%), Harbour dues (12%). 

03. The above four services are received from different service provider and average the cost per Cubic meter 

04. Container Cargo movers Service Provier raise the invoice to his customer, mentioning the above four services are reimbursement and Service charges 5%. He is charging Service Tax 14.5% on the 5% of the Service Charges.

05. But the Service tax department says that he has to pay service Tax on the total invoice value, including the reimbursement. Please advice

Replies (8)

Yes, the service tax is also liable on reimbursement. The service provider need to charge service tax on invoice value. 

i am also agree with views of Mr. Shekhar, department is correct on this view as per amendment in finance act, 2015  now all types of reimbursements were includible under assessable value for the calculation of service tax.

 

 as per Finance act 2015  service tax ia always payble on Invoice value hence i am agree with the service tax depatmnet

'Pure agent' reimbursement (subject to fulfillment of prescribed conditions under per Rule 5(2) of STR) will continue to be excluded from value of taxable service. This lines i found in one article.
Can anyone clarify whether these services are covered under the concept of pure agent

Mr. Kalaikovan,

Is it a export shipment or import???  

As per the amendment by Finance Act, 2015 now every type of reimbursement will be included in assessable value of taxable service.  

If the matter relates to period before amendment of section 67, then a ground is available to get relief.


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