Service Tax not levied on reimbursable expenses incurred by the Assessee

Last updated: 23 June 2023

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The CESTAT has ruled that service tax is not applicable on expenses incurred by a company on behalf of its clients, provided these expenses are purely reimbursable. The tribunal found that the company acted as a pure agent when it paid for services like deconsolidation and transportation on behalf of clients and was later reimbursed. Therefore, these reimbursable expenses are not subject to service tax.

Court :
CESTAT, Ahmedabad

Brief :
The CESTAT, Ahmedabad in United India Shipping Services v. Commissioner of GST and Central Excise [Service Tax Appeal no. 42191 of 2015 dated June 12, 2023]set aside the order confirming demand on expenses like deconsolidation charges, transportation charges, DO charges which are first collected by the assessee from their clients and thereafter paid to the service provider. On the ground that the assessee has provided such services as pure agent and thus, not liable to service tax.

Citation :
Service Tax Appeal no. 42191 of 2015 dated June 12, 2023

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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