St under rcm on reimbursement to non executive director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2016 Dear Experts, our company's non executive director was staying in hotel for business purpose however he has paid hotel bill i.e 1400 rent charge and rs. 122 ST total 1522/- now company is going to reimburse this 1522 to director, hence company is also liable to Pay ST under RCM on reimbursement plzz let me know on which amount company will pay ST under RCM weather on 1400 or on 1522 (inslusive ST)... Regard Sumit Jeswani

CA. Divyansh Agarwal

CA. Divyansh Agarwal (Expert)
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09 January 2016 rcm applicable when services received from director here there is no services red from director he is being reimbursed for the purpose of work done on behalf of company hence service tax applicable debit the expenses in travelling expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2016 sir, as per my view ST is applicable on service taken by non executive director also ST under RCM is to applicable on reimbursement to non executive director...

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CA. Divyansh Agarwal

CA. Divyansh Agarwal (Expert)
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09 January 2016 How rcm be applicable if service is taken by director he is service receiver so under rcm he should be liable. rcm applicable only when director provides the services to company if he is charging some fees from company along with hotel bill then same would be chargeable under rcm however if he is claiming only expenditure then he is claiming it under pure agent concept where he is not charging any profit thereon.

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2016 sir director is providing his service to company hence company is also paying 100% ST on remuneration to this non executive director also company is deducting TDS u/s 194j, s therefore company is liable to pay ST under RCM on reimbursement of this hotal bill...

CA. Divyansh Agarwal

CA. Divyansh Agarwal (Expert)
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09 January 2016 i am totally agree with you my view point is only this if the payment is made by director on behalf of company then under pure agent concept the services may be exempted if hotel bill is in the name of company. but if the conditions are not fulfilled then it is better to charge service tax on total bill as you can not treat service tax charge in hotel bill as exclusion of reimbursement.

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2016 sir. simply. this non executive director had incurred this hotel exp. on the behalf of company however the hotel bill is in the name of director, as per my view company has to pay ST under RCM on reimbursement of this hotel bill to director..