Service tax on event charges - reimbursement

[SARAVANAN RENGACHARY]

We are participating in a exhibition which will be held in India. Exhibition charges will be paid by us to the event running company along with applicable taxes. Since we are distributors, we will be displaying the products of OEM manufacturers.

OEM manufacturer who is in India is willing to reimburse 50% of event participating cost to us.

please let us know whether this reimbursement attract Service Tax ?.

Regards

saravanan.

AI Summary

Reimbursement of event charges not taxable where expense recovery lacks consideration and is supported by invoices.
Reimbursement of exhibition charges paid by a distributor is not service-taxable where the distributor is merely reimbursed by the OEM for expenses evidenced by invoices and does not provide services or retain a markup; valuation rules do not apply unless the distributor undertakes a taxable activity or claims amounts beyond actual expenses, in which case the reimbursement may constitute consideration and attract tax.