Is Reimbursable expenses included in Assessable value

[Asked by Guest]

Dear Sir,

IS Reimbursable expenditure related to travel and hotel expenses charged separately in the invoice say for example Erection and Commissioning service is to be included in Taxable value for calculating Service tax value, and if theservice provider has included in taxable value and has charged service tax to us on that value and we had availed service tax credit of such as a input service, Will be any issue for us, Please expalin, Pls give any reference regarding this,Thanks and regards.

AI Summary

Pure agent exclusion: reimbursable expenses may be excluded from taxable service value if statutory conditions satisfied.
Exclusion of reimbursable expenses from taxable service value depends on Rule 5: Rule 5(1) includes expenditure incurred in providing the service in gross value, while Rule 5(2) excludes expenditure incurred by the provider as a pure agent where eight cumulative conditions are met (pure agent role, recipient use and liability, recipient authorisation and knowledge, separate invoice indication, recovery of actual amounts only, and that such goods/services are additional to provider's own services). Whether an item qualifies is fact specific and requires documentary support.