St on reimbursements

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Krishna Mohan (Querist)
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18 January 2012 I am a practicing CA; If my clients gives cheque to me including his tax and my fees, shall i collect ST on the tax also claiming it as reimbursement?
Another example, i am paying the taxes first from my account and later he is giving consolidated cheque to me. In this case, shall i collect ST on taxes also?

U S Sharma

U S Sharma (Expert)
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18 January 2012 for tax amounts you can issue invoice, but on the remaining balance you have to issue invoice and charge ST

for tax payments you have to submit him the challans paid from your account.

Krishna Mohan

Krishna Mohan (Querist)
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21 January 2012 Other expers also; please respond

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Arun Gulati

Arun Gulati (Expert)
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22 January 2012 In my view you are squarely falling under Rule 5 pertains to reimbursable expenditure incurred by the service provider as a pure agent of his client. Moreover, there cannot be service tax on statutory levies and it is better to show such tax paid separately in your invoice.