Service Tax Salary reimbursement to Outsourcing Expenses

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Hi,

I am working in a private limited company where we have given some data entry work to some outsiders. They are submitting bills as below:

Salary Reimbursement           Rs.100000

Service Charges                       Rs.10000

Service Tax ( @ 10.3%)              Rs.11330

 

My query was whether service tax to be charged on full amount i.e,1,10,000 or service charges amount only i.e, Rs.10,000

Please suggest me on above matter

Replies (1)

Dear Bhanuprasad,

As the data entry work is outsourced, irrespective of the way the billing is done (calling it as Sal Re-imb), the full amount will attract service tax. Hence the ST on 1,10,000 is correct.

Thanks,

Ganesh

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