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Service tax on reimbursement of expenses

A.K.CHATURVEDI (SERVICE) (84 Points)

02 June 2011

My consultant raised a bill on me for the reimbursement of travelling expenses & CHARGED Service Tax on . Pl. advice that Service Tax is applicable on reimbursement of expenses

thanx in advanse for your valuable advice

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5 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 02 June 2011

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

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 02 June 2011

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.

(Guest)

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

Pawan Kr. Tomar (CA) (169 Points)
Replied 03 June 2011

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

Ayan (Employee) (40 Points)
Replied 03 June 2011

Originally posted by : Unnikrishnan Nair N
	Reimbursements form part of value of service unless the same has been incurred in the capacity as pure agent.