I need an advice on the following.
If any company want to hire services to receive goods, warehouse goods, bill the goods as per instructions and pay the service provider some fixed percentage as per the turnover. The company intents to entered an agreement with the said agency for the same. One of the clause of the agreement would be that company will reimburse them the actual electricity charges for the said warehouse. Ther service provider do not own the warehouse. They may take a warehouse on rent from say "X" The electricity bill will be in the name of X which will be paid by the service provider. Now in this scenerio, I would like to know
1. Whether Service Tax is applicable on this type of reimbursement of electricity
2. Can the company pay the electricity bill directly so that the above question do not arise. Please note that original lease agreement will be between service provider and "X" and the electric meter is in the name of "X"
3. Can we use the judgement given by Delhi High Court in similar case
Thanks in advice of your views
CAclubindia
