Is service tax applicable on reimbursement of freight.

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Is service tax applicable on reimbursement of freight expnes incurred by employee from railway station / airport to factory.

We are getting some materials thru Railways. Our employee visits railway station and hires local vehicle. Payment is made by employee to hired vehicle. 

Latter on he raises a cash voucher for reimbursement. 

Are we supposed to pay service tax on this type of reimbursement??

 

Best Regards,

Bhan K K

 

Replies (1)

Yes Service Tax would be payable under reverse charge mechanism in respect of reimbursement of expenses pertaining vehicle hire charges as per the provisions of Service Tax Act 1994


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