Service Tax on reimbursement of exp.

[RAM SHARMA]

Dear Expert,

As a  Consignee Agent i am doing  sale of consignment goods on commission basis. Our income is  commision from sale. In spite of that we are reimburse transporation exp. and local handling/other charges from the company. would we include local handling and reimburesement exp in our gross income to assess the service tax liability.

Our income from commission is nine lacs and reimburse expenses is two lacs. Pl suggest.

Thanks

AI Summary

Service tax on reimbursements denies taxability of genuine expense reimbursements, while commission receipts remain taxable.
Reimbursed payments for transportation, local handling and similar disbursements are separate from commission and, when they are bona fide pass through expenses, should not be included in the value of the taxable service. The valuation provision confines taxable value to the gross amount charged by the provider; any rule treating all incurred costs as additional consideration goes beyond that provision. Commission income, however, constitutes the taxable receipt.