We are rendering only services to our clients. For this services we have raised service charges invoice, Debit Note for Reimbursement of stationary expense, Reimbursement of incidental expenses and Reimbursement of Fees etc For all this Invoice and reimbursement debit note we are charging service tax 12.36%.
Our client insist service tax not applicable for Debit notes.
Please clarify
Regards,
DK
Mr.Karthikeyan,
Service tax liability is not dependent on the name and type of document used to charge the customer. It is based on the type of service. Next, reimbursement of any expenses is out of service tax purview.
Service tax leived only on the services provided, but it will not be leived on reimbursement. if the invoice include reimbursement expenses, then service tax will be leived. in our case and in my opinion , service tax need not be deducted on reimbursement expenses as a separate debit note is raised.
Reimbursable expenditure should be included in the taxable income with effect from 18/04/2006 as per the valuation rules. So, Shri.Karthikeyan what you are doing is correct and legal.
Dear All,
Service tax should be charged to your client even when u have raised thwe debit notes for recovery of expenses. The photo copy of invoice raised by your vendor should be attached alongwith the Debit note , so that your client can take the input credit benefit based on the invoice attached.
Rgds./Nitesh
At the end of of a work, if additional recovery has been made, a supplementary invoice for additional amount of service tax will be beneficial for the buyer for taking credit, and for the service provider for payment of service tax.
yes reimbursement of any expenses is out of service tax purview.
Is there a liability to pat Incometax on reimbursement if you charge service tax.
CAclubindia
