service tax on debit note

Yes it is definately service ,Service tax apply on debit note for advertisement expenses sharing under category of BSS.

If the cost sharing is amongst the group companies -

Sharing of expenses among group companies/entities are general practices. Such sharing of expenses is done by issuing debit note on other group company. In this transaction there is no service rendered by one group company to another group company, it is merely an allocation of expenses out of common pool. As the service tax paid on such service is already paid by the corporate office, now again on sharing of such expenses cannot attract service tax again.

Kindly note that cost incurred on staff and shared by group companies’ fall under the Business Auxiliary Services. In the case of Glaxo Smithline Pharmaceuticals Ltd V Commissioner of Central Excise (2005–TOIL-688-CESTATE), it was held that cost incurred on staff and shared by staff fall under Business Auxiliary Services.

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