Service tax on reimbursement of expenses

Reimbursements form part of value of service unless the same has been incurred in the capacity as pure agent.

Under Rule 5 (1) of the ST determination of value rules specify that all costs incurred in connection with providing a service would be included in the gross amount.

Only if the amounts are incurred as a pure agent and satisfy the elaborate conditions then they maybe excluded under rules 5(2)

It is another matter that the section 67 only seeks to tax the gross amount changred for such services and could be challenged in the courts.

Yes service tax will  be applicable in this caes since whatever service provider  charged are required to include in the gross amount unless it is the caes of PURE AGENT

Originally posted by : Madhukar N Hiregange
	Under Rule 5 (1) of the ST determination of value rules specify that all costs incurred in connection with providing a service would be included in the gross amount. Only if the amounts are incurred as a pure agent and satisfy the elaborate conditions then they maybe excluded under rules 5(2) It is another matter that the section 67 only seeks to tax the gross amount changred for such services and could be challenged in the courts.

 All cost incurred in connection of providing services will be included unless incurred as a pure agent