Applicability of service tax under reverse charge mechanism

This query is : Resolved

CA CS Nitin (Querist)
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24 September 2013 Ours is a limited liability company, registered under companies act and hold service tax registration. Our company has number of associate enterprises across the world.

Employees from our company participate in number of exhibition across the world to promote and sale our goods. If the exhibition is in a country wherein our associate concern is available, they help us in booking accomodation, transporation, exhibition hall, exhibition booth vendors, printing material, etc. and they pay for the same at that point of time.

On completion of the particular exhibition, they raise a debit note on us without adding any margin. It is purely a reimbursement debit note wherein all the supporting documents relating to above expenditure are enclosed.

I hereby want to know whether service tax will be applicable in our case under reverse charge mechanism, under old service tax law and under new service tax law based on negative list.

CA Suresh Jain

CA Suresh Jain (Expert)
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25 September 2013 I suggest you to have a contract which shows that the person is working purely as agent. Take all bills in the name of your company. In such cases the payment to the person may be called as reimbursement and be not liable for service tax.

The detailed answer can be given on sharing the full detail of vouchers/ contracts etc

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case