Is out of pocket expenses are also considered for service tax computation.
Please tell me in detail.
Naveen Chand Khulve (CA) (1521 Points)
14 January 2009Is out of pocket expenses are also considered for service tax computation.
Please tell me in detail.
OFFICESELVA
(Service)
(515 Points)
Replied 14 January 2009
If out of pocket is incurred first and the same is getting reimbursed later from the service receiver then the same should be included in the taxable income and service tax should be paid.
Pavan Jain S
(Chartered Accountant)
(1575 Points)
Replied 15 January 2009
Service tax is leviable on gross amount charged.
Gross amount charged includes reimbursement of out of pocket expenses. Hence, the same shall be included in the value of taxable services.
However, if the expediture is incurred as a pure agent and reimbursement is made in respect thereof, no ST liability arises.
Rajesh Kumar
(Advocate- Tax)
(7806 Points)
Replied 17 January 2009
The issue has been settled with Tribunal's judgment in case of Amit Sales.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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