18 February 2009
Whether service tax is to be charged on the bill for travelling bill reimbursement claims submitted by a chartered accountant to the client or not
18 February 2009
In general if the reimbursement amount is in relation to the taxable service, such payment should be included in the value of the services and hence service tax should be charged on that.
19 February 2009
Yes as per following extract from an Article published in http://www.thehindubusinessline.com/2008/02/16/stories/2008021650250900.htm
"...if an auditor undertakes an audit of an outstation client and incurs travelling expenses of Rs 20,000 (airfare) and charges a fee of Rs 20,000, he ends up paying service tax not on Rs 20,000 but on Rs 40,000, which include travelling expenses"
19 February 2009
Whether service tax is to be charged on the bill for travelling bill reimbursement claims submitted by a chartered accountant to the client or not
20 February 2009
All expenses, incurred in relation to rendering of the service, then yes traveling bill reimbursement will form a part of the taxable amount. Since traveling is inter connected with the service for rendering the service, it will form a part of the taxable amount.
To reduce such burden of cost it is advisable that the client arranges for the travel of the CA.
20 February 2009
Sri Dayal has given a good practical answer. These days it is possible to book tickets from anywhere and arrange for delivery at different place. From the Client's point of view, in any case, he is bound to foot the bill. If initial payment is made by CA, the Client has to pay (reimburse) Service Tax
So it is a good tax planning measure within the framework of law
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