Can service tax be charged on reimbursement of expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2013 Dear Members,

I want to know that whether service tax can be charged on reimbursement of expenses such as telephone expenses.I know that it can be charged but would like to know whether the service tax would be charged on the amount inclusive of service tax or excluding the service tax.For example: Telephone bill is of Rs.112 including service tax so service tax is to be charged on Rs.100 or Rs.112.

CA Parul Saxena online

CA Parul Saxena online

(Expert)
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04 March 2013 elborate your query.....

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2013 See what I want to know is that whether service tax is chargeable on the amount whole amount of Rs.112 i.e including service tax than the total amount of debit note will amount to Rs.126. So here there is double taxation i.e. amount of Rs.12 is already charged by the telephone Company so if again again the tax is charged than the tax would come to Rs.125 (112*12.36%)

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CA Parul Saxena online

CA Parul Saxena online

(Expert)
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04 March 2013 service tax is charged only on the gross amount charged for providing the service...it is not charged on reimbursement...in your case if you are recovering telephone expense from someone then you can not charge service tax on telephone as you have not provided telephone services and simply you are asking for reimbursement and not the charge of your service...