We conduct management development programs in our institute. The professional charges for the same are claimed by way of raising invoice with service tax. But we also bear the stay and travelling expenses of the participants, which we later get it reimbursed by the participating company. Is there any service tax liability on these reimbursement of expenses??
4 Replies
Mallikharjun
(Deputy Manager)
(304 Points)
Replied 23 February 2012
Under the new service tax valuation rules, reimbursement of expenses shall also be included in the taxable value unless the service is provided under "pure agent". To avoid litigation, it is advicable to include these expenses and pay service tax. If you want to avoid this, raise debit note seperately for these expenses.
R Gopalan
(Partner)
(104 Points)
Replied 23 February 2012
A . owner of 2400 sq.feet of land and sells 1344 sq.feet to a promoter and the promoter is constructing 7 flats and selling at Rs.6000000 per flat .The remaining unsold plot kept by the owner and the promoter agrees to consruct two flats and pay Rs.7 lakh to the owner
The promoter refuse to pay Service tax
what is the consequences and under what sections and who is responsible to pay service tax
is there any case law on this subject pls indicate
thank you,
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 23 February 2012
Stay and travelling expenses of the participants is an integral part of provision of service and as quoted by you it doesnot come under a 'pure agent' sort of activity..thus you need to pay service tax on that amount too..
R Gopalan
(Partner)
(104 Points)
Replied 24 February 2012
the reply given by you does not satisfy the requirements.. pls be specific to the points raised by us..
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