SERVICE TAX ON REIMBURSEMENT

[Guest]

Dear Sir

Please suggest is case of reimbursement of expenses which is covered under section 67 now under service tax.
In our case we are paying a heavy amount to C&F Agent towards reimbursement expense like freight, rent, telephone charges etc.. out of which some expenses substantiated with bill etc. or some are not.

AI Summary

Debate on Service Tax Applicability to Reimbursable Expenses Under Section 67; Focus on Clearing & Forwarding Agents' Role. A discussion on a forum addresses the applicability of service tax on reimbursable expenses under section 67, particularly in relation to payments made to clearing and forwarding (C&F) agents. The consensus among participants is that reimbursable expenses are generally subject to service tax unless the service provider acts as a 'pure agent.' A 'pure agent' is defined by specific criteria, including acting on behalf of the recipient, not holding title to goods or services, and recovering only the actual amount incurred. Clarifications provided by forum members helped dispel doubts regarding tax liabilities for such reimbursements.