Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Service tax reverse charge on out of pocket expenses

Queries 1445 views 4 replies

Jyothis

Article

1127 Points Posted on 30 April 2016

Whether RC applicable on Out of pocket expenses stated in Taxable invoice.

Say Legal charges :

Professional fees of Advocate for filing petition: 15,000

Out of Pocket expenses : 3000

Invoice Total : 18,000

On which amount Service reverse charge & tds to be computed and deposited by company.

Replies (4)

MEGHA CHAUHAN

CHARTERED ACCOUNTANT

61 Points Posted on 30 April 2016

As per Recent Amendment of Finance Bill, 2015 with effect from 14-05-2015,

“consideration” includes:(i) any amount that is payable for the taxable services provided or to be provided;(ii) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed;

So Service Tax is Payable on Rs. 18,000 i.e. including reimbursement expense.

Aayan Aggarwal

24 Points Posted on 30 April 2016

service tax shall be chargeable on the amount as per amendment in section 67.

Guest

As per recent amendment in Sec 67 , value of service tax include reimbursement of expenses unless specifically excluded . Hence you have to pay ST on it.

Jyothis

Article

1127 Points Posted on 30 April 2016

So Valuation of out of pocket expenses as taxable service is also applicable for Reverse charge.

1) In some case court fee(Filing)/Document charges are also charged by Advocate in his invoice,so it necessary to pay reverse charge on such amount also.

2) Please comment on tds applicability on Rs.15k or Rs.18k.