Reimbursement of expenses

This query is : Open

KALYANA SUNDARAM.T.V. (Querist)
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29 June 2012 OUR COMPANY HAS HIRED CONSULTANTS FROM ANOTHER COMPANY. APART FROM THE REGULAR CONSULTANCY CHARGES PAYABLE TO THE COMPANY, THE EXPENSES INCURRED FOR THEIR STAFF WHO SIT IN OUR OFFICE LIKE MEDICAL EXPENSES, STAFF WELFARE, CAR FUEL EXPENSES ARE ALSO TO BE BILLED BY THEM ON ACTUAL BASIS.
THEY RAISE TWO SEPERATE BILLS, ONE FOR THEIR CONSULTANCY WHICH IS AS PER A SPECIFIC AGREEMENT AND ANOTHER FOR THE REIMBURSEMENT OF EXPENSES REFERRED ABOVE.
MY QUERY IS 1.) WHEHTER SERVICE TAX IS LEVIABLE FOR REIMBURSEMENT OF EXPENSES WHICH IS ON ACTUALS?.
2.) WHETHER I SHOULD DEDUCT TDS FOR REIMBURSEMENT OF THESE EXPENSES WHEN I MAKE THE PAYMENT?
PLS ADVICE

CA UMESHKUMAR R. ACHARYA

CA UMESHKUMAR R. ACHARYA (Expert)
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03 July 2012
As per Service Tax Rules You are liable to pay service tax on reimbursement of Expenses

even though it is actuals because your payment is part and parcel of consideration for services rendered.

2. Yes you are liable for TDS on reimbursement of expenses also.