Reimbursement vs service tax
Eswar Reddy S (CFO- at NHTF) (58270 Points)
13 July 2014
Dear Sir,
Is service tax applicable on reimbursement ?
2 Replies
CA and CMA Ravinder Singh
(CA and CMA)
(853 Points)
Replied 13 July 2014
no..its not applicable on re imbursement of expenses
Nagendra Hegde
(Chartered Accountant)
(1948 Points)
Replied 15 July 2014
Rule 5 (1) of Service Tax (Determination of Value) Rules, 2006, specifically provides the clause for inclusion of cost or expenditure in value of taxable services. This deeming fiction created to consider all the expenditure or costs incurred by the service provider in the course of providing taxable services.
However Rule 5 (2) provides exclusion for those expenditure or costs incurred by the service provider as a pure agent of the recipient of the service subject to fulfilling various conditions specified there in. Hence if the service provider gets actual re imbursement of expenses incurred in the course of output service, then subject to the conditions specified in the rule, such expenses can be excluded while arriving the taxable value.
The Delhi High Court in case of Intercontinental Consultants and Technocrats P Ltd has down the provisions related to reimbursement as ultra-virus.
Recent Topics
- Interest and penalty on advance tax shortfall
- Joint Account with 3 legal heirs.......
- TCS adjustment
- GST audit and scrutiny
- GSTR9 Table 8 - 8A and 8B difference is 4D(1). in
- Eway Bill query for inter state
- Taxability of income in USA of resident oci holder
- Clarity regarding Sec 16(4)
- GST ON HOTEL ROOMS details
- Relief for Delayed Filing of Tax Forms
Related Threads
CAclubindia
