Taxability of Reimbursement of expenses under Service tax and GST

Last updated: 23 June 2022
Quick Summary
The Delhi CESTAT ruled that service tax is not payable on reimbursements of expenses, stating the nature of the service shouldn't affect taxability. This decision followed the Supreme Court's declaration that Rule 5 of the Service Tax Valuation Rules was ultra vires. Under GST, expenses incurred as a 'pure agent' are excluded from the value of supply if specific conditions are met, otherwise, they are taxable.

Court :
Delhi, CESTAT

Brief :
The Delhi, CESTAT in M/s Seher v. Commissioner of Service Tax Delhi [Service Tax Appeal No. 52708 of 2016dated June 13, 2022] held that, service tax is not payable on reimbursement of expensesas the nature of service should make no difference to the taxability of reimbursement.

Citation :
Service Tax Appeal No. 52708 of 2016dated June 13, 2022

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Bimal Jain
Published in GST
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