Required clerification on Reimbursement of expenses & cenvat credit thereon

[RAM SHARMA]

Dear Experts,

The Hon’ble President has given assent to the Finance Bill, 2015 on Thursday, May 14, 2015. Accordingly, the Finance Bill, 2015

Now as per Section 67: Amendment in definition of the term ‘Consideration’to include:

a) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed like Pure Agent.;

1) According to this rule,

Whether service tax payable on all reimbursable expenses is applicable including taxable services paid by service provider (CHA) on our behalf like govt. fee & custom duty etc.

2) Secondly,We are giving all reimbursable expenses to our consignment agent like freight and handling charges etc up to the end user. We are also giving commission on sale to our consignment agent and availing cenvat credit on such commission.

Whether we are eligible service tax credit on freight and handling charges which is reimburse by the company to own consignment agent.

With Regards

AI Summary

Are reimbursable expenses like government fees subject to service tax? Clarification on CENVAT credit eligibility for freight. A discussion on a forum sought clarification on the applicability of service tax on reimbursable expenses and the eligibility for CENVAT credit. The query involved whether service tax is applicable on reimbursable expenses like government fees and custom duties paid by a service provider and whether CENVAT credit is available on reimbursed freight and handling charges. One expert clarified that statutory payments like government fees are not subject to service tax and that reimbursed expenses related to input services are eligible for CENVAT credit. Another expert elaborated on the definition of reimbursement, emphasizing that it should not be considered as consideration for services, and thus should not be included in the taxable value of services.