27 March 2010
A indian pvt. company(X) helps(acts as a mediator betw. indian supplier(A) and foreign buyer(B)) in exporting material on the instructions of another foreign company(say Y). Now this foreign co.(Y) remit expenses on monthly basis to this indian company(X). There is no agreement/MOU between this Y and indian company. My querry is, whether this reimbursement attract S.tax on 100% reimbursement or there is some way out to reduce this liabilty ( say by having some agreement or so.)
27 March 2010
If reimbursement is actuals based on sufficent proofs then service tax will not apply on the same. If you charge adhoc or where proper supportings are not there then service tax will come into picture.
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