Service tax on reimbursement

Queries 681 views 3 replies

CA Pradeep Jain

Job - Finance Department

69 Points Posted on 24 February 2009

Hi All

Company A has entered into an agreement with Company B for providing consulting services. While provding such services Company A has been recipeint of travel servcices( Tour & travel package) from Company C, which was arranged by Co B.

Invoice was raised in the name of Co A but paid by Co B.

Invoice

Value of services - 5039

service tax @ 12.36% (less 60%abatement) - 249

Total value - 5288

When Co B has rasied the debit note for the reimbursement of the above amount.

They have charges as

Car hire charges from Co C - RS 5288/-

Service tax @ 12.36% - Rs 654

Total amount - Rs 5942/-

IS Co B correct in charging service tax.

Please reply. Also please let me know relevant sections of your reply

Thank you

Replies (3)

Pratik K

Student

3406 Points Posted on 24 February 2009

i do not know whcuih section applies here hence I remain silent here

Sachin

Chartered Accountant

419 Points Posted on 24 February 2009

Originally posted by :Pradeep
"	Hi All Company A has entered into an agreement with Company B for providing consulting services. While provding such services Company A has been recipeint of travel servcices( Tour & travel package) from Company C, which was arranged by Co B. Invoice was raised in the name of Co A but paid by Co B. Invoice Value of services - 5039 service tax @ 12.36% (less 60%abatement) - 249 Total value - 5288 When Co B has rasied the debit note for the reimbursement of the above amount. They have charges as Car hire charges from Co C - RS 5288/- Service tax @ 12.36% - Rs 654 Total amount - Rs 5942/- IS Co B correct in charging service tax. Please reply. Also please let me know relevant sections of your reply Thank you	"

Dear Pradeep,

As per section 37 and Service Tax (Determination of value) Reules, 2006 the Company is B is Correct. please write me Email for the more clarification sachinagarwalcallb @ gmail.com