Urgent urgent - ST Debit note/invoice

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Sumant T Hegde

CA Final Student

40 Points Posted on 22 August 2014

Hi everyone

We are in Logistics and CHA business.

Please tell me the procedure to pass on service tax on reimbursement of expense. Presently we are raising debit note for full amount and attaching the invoice of person who has provided the service. Now the parties are asking for debit note mentioned as debit note/invoice with our service tax reg no., . Can we give like that?

Kindly give answer with reference.

Replies (3)

Venkatanarayana GM

Partner associate at Hiregange & Associa

1120 Points Posted on 22 August 2014

Dear Mr. Hegde,

In single invoice you can have two columns one is "Taxable" & another is "Non - taxable" .

Taxable portion is the consideration on which CHA has Markup and so liable for ST.

On Non - Taxable column is the consideration which is collected as "Pure reimbursement" hence not liable for ST.

Also suggested to comply with the conditions specified in Rule 5 of Service Tax (Determination of Value) Rules, 2006.

Regards

Venkat

Sumant T Hegde

CA Final Student

40 Points Posted on 25 August 2014

Originally posted by : Venkat
	Dear Mr. Hegde, In single invoice you can have two columns one is "Taxable" & another is "Non - taxable" . Taxable portion is the consideration on which CHA has Markup and so liable for ST. On Non - Taxable column is the consideration which is collected as "Pure reimbursement" hence not liable for ST. Also suggested to comply with the conditions specified in Rule 5 of Service Tax (Determination of Value) Rules, 2006. Regards Venkat

Dear Venkat,

We are not raising Invoice for the reimbursement expenses. Instead we are issuing debit note for those expenses. We forward our debit notes attaching the bills raised in favour of us by the service provider for such services.

Venkatanarayana GM

Partner associate at Hiregange & Associa

1120 Points Posted on 25 August 2014

If Markup is there on those debit notes then the same is liable for service tax .

If no markup but only pure reimbursement then, same can keep out of levy of service tax.

Saying that your procuring services from vendor to provide service to your customer . However for this you have to ensure that there is an agreement and intimate fact to dept. to ensure no litigation in future.

Venkat