I am working with a pvt. company. My company has rent agreement for guesthouse building. The electricity charges will be pay by the vendor & he will reimburse it from company. So, now the vendor has raised the invoice with supporting & charged service tax on electricity bill amount.
Please give the opinion on that, It is allowable or not ?
08 June 2013
Reimbursement on actual basis will not apply service tax
Reimbursement Of Expenses Not Subject To Levy Of Service Tax. Ref:Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India and Anr., W.P. (C) 6730/2008
Ask him to provide bill for re-imbursemnet of expences with out servicetax on basing judgement given in intercontinental consultants and technocrats pvt.ltd case
he may provide you bill inclusive of service tax basing service tax rule 5(1) but in above said case it is held that,
1) rule 5(1) was ultravires section 66 and 67 of finance act 1994,
2)it is held that cost incurred by service provider cannot be part of gross amount charged for service provided..