Need to include reimb. in turnover for service tax rtn ....?
This query is : Resolved
08 May 2014
dear sir,
if a company having turnover of rs. 20,00,000
it includes 5,00,000 as reimbursement
he is charging service tax on rs. 15,00,000
when he will file his service tax return how much amount
he wil show in st - 3 as gross amount
a) 20,00,000
or
b) 15,00,000
if a company having turnover of rs. 20,00,000
it includes 5,00,000 as reimbursement
he is charging service tax on rs. 15,00,000
when he will file his service tax return how much amount
he wil show in st - 3 as gross amount
a) 20,00,000
or
b) 15,00,000
08 May 2014
UR REIMBURSEMENT EXPENSES AS PER FOLLOW OF RULE 5(2) OF STAX
CONFIRM AFTER FILE UR ST3 AND CONSIDERED RS 15 00 000/-
CONFIRM AFTER FILE UR ST3 AND CONSIDERED RS 15 00 000/-
09 May 2014
dear sir,
thank you for your reply but
suppose i have included 5,00,000 in turnover and in service tax return i shown in point no.
B1.12 as any other amount claimed as deduction please specify ( i shown as reimbursement received rs. 5,00,000/- )
is their any issue will be raised by ST department
and 2nd thing
please go through this link
http://www.jsandco.in/Uploaded%20Image/Applicability%20of%20Service%20Tax%20on%20Reimbursement%20of%20Expenses.pdf
here conclusion says service tax should be collect on reimbursement as a conservative approach
thanks
thank you for your reply but
suppose i have included 5,00,000 in turnover and in service tax return i shown in point no.
B1.12 as any other amount claimed as deduction please specify ( i shown as reimbursement received rs. 5,00,000/- )
is their any issue will be raised by ST department
and 2nd thing
please go through this link
http://www.jsandco.in/Uploaded%20Image/Applicability%20of%20Service%20Tax%20on%20Reimbursement%20of%20Expenses.pdf
here conclusion says service tax should be collect on reimbursement as a conservative approach
thanks
03 August 2024
When filing your Service Tax return (ST-3), the handling of reimbursements in the turnover and service tax computation requires careful attention to ensure compliance. Here’s how to address the situation:
### 1. **Gross Amount to be Shown in ST-3 Return:**
**Understanding Turnover and Service Tax Treatment:**
- **Gross Turnover:** The gross turnover should include the total amount received for services rendered, including reimbursements, as per the accounting principle. However, for Service Tax purposes, the treatment of reimbursements can vary based on their nature.
**Scenario:**
- **Turnover (Including Reimbursement):** ₹20,00,000
- **Reimbursement:** ₹5,00,000
- **Amount Charged Service Tax:** ₹15,00,000
**How to Report in ST-3:**
- **Gross Amount:** In the ST-3 return, you should show the gross amount of ₹20,00,000 (which includes ₹15,00,000 for services and ₹5,00,000 for reimbursements) in the turnover field. This is because the gross turnover reflects the total amount invoiced.
- **Deductions:** In the ST-3 return, you should specify the reimbursement of ₹5,00,000 under the relevant section where you mention "any other amount claimed as deduction." Typically, this would be reported in the section that deals with deductions or adjustments, like B1.12, as you mentioned.
### 2. **Service Tax on Reimbursements:**
**Applicability of Service Tax on Reimbursements:**
- **Service Tax on Reimbursements:** Generally, service tax is applicable on reimbursements if they are for expenses that are part of the taxable service. For example, if the reimbursement is for expenses incurred to provide the service, it may attract service tax.
- **Conservative Approach:** As per the link provided, the conservative approach suggests charging service tax on reimbursements. This is because the nature of the reimbursement could imply that it is part of the service provided and thus taxable.
### 3. **Potential Issues:**
- **Reconciliation:** Ensure that the total amount (₹20,00,000) is correctly reported, with the reimbursement amount correctly classified and deducted. The Service Tax department may review if the reimbursement is included in the turnover but not reflected in the tax calculation.
- **Documentation:** Keep detailed records and invoices that clearly differentiate between the service amount and the reimbursement. Proper documentation will support your claims in case of any audit or query from the Service Tax department.
- **Compliance:** Ensure compliance with the latest guidelines and circulars issued by the CBEC or CBEC-GST, as rules regarding reimbursements and their taxability can evolve.
**Conclusion:**
In your ST-3 return:
- Report ₹20,00,000 as the gross amount in turnover.
- Deduct ₹5,00,000 as a reimbursement under the specified section (like B1.12) for deductions.
- Confirm if service tax applies to reimbursements based on the latest guidelines and your specific circumstances.
For the most accurate advice and to address specific issues related to your situation, consider consulting with a tax professional or chartered accountant who specializes in indirect taxes.
### 1. **Gross Amount to be Shown in ST-3 Return:**
**Understanding Turnover and Service Tax Treatment:**
- **Gross Turnover:** The gross turnover should include the total amount received for services rendered, including reimbursements, as per the accounting principle. However, for Service Tax purposes, the treatment of reimbursements can vary based on their nature.
**Scenario:**
- **Turnover (Including Reimbursement):** ₹20,00,000
- **Reimbursement:** ₹5,00,000
- **Amount Charged Service Tax:** ₹15,00,000
**How to Report in ST-3:**
- **Gross Amount:** In the ST-3 return, you should show the gross amount of ₹20,00,000 (which includes ₹15,00,000 for services and ₹5,00,000 for reimbursements) in the turnover field. This is because the gross turnover reflects the total amount invoiced.
- **Deductions:** In the ST-3 return, you should specify the reimbursement of ₹5,00,000 under the relevant section where you mention "any other amount claimed as deduction." Typically, this would be reported in the section that deals with deductions or adjustments, like B1.12, as you mentioned.
### 2. **Service Tax on Reimbursements:**
**Applicability of Service Tax on Reimbursements:**
- **Service Tax on Reimbursements:** Generally, service tax is applicable on reimbursements if they are for expenses that are part of the taxable service. For example, if the reimbursement is for expenses incurred to provide the service, it may attract service tax.
- **Conservative Approach:** As per the link provided, the conservative approach suggests charging service tax on reimbursements. This is because the nature of the reimbursement could imply that it is part of the service provided and thus taxable.
### 3. **Potential Issues:**
- **Reconciliation:** Ensure that the total amount (₹20,00,000) is correctly reported, with the reimbursement amount correctly classified and deducted. The Service Tax department may review if the reimbursement is included in the turnover but not reflected in the tax calculation.
- **Documentation:** Keep detailed records and invoices that clearly differentiate between the service amount and the reimbursement. Proper documentation will support your claims in case of any audit or query from the Service Tax department.
- **Compliance:** Ensure compliance with the latest guidelines and circulars issued by the CBEC or CBEC-GST, as rules regarding reimbursements and their taxability can evolve.
**Conclusion:**
In your ST-3 return:
- Report ₹20,00,000 as the gross amount in turnover.
- Deduct ₹5,00,000 as a reimbursement under the specified section (like B1.12) for deductions.
- Confirm if service tax applies to reimbursements based on the latest guidelines and your specific circumstances.
For the most accurate advice and to address specific issues related to your situation, consider consulting with a tax professional or chartered accountant who specializes in indirect taxes.
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