SERVICE TAX ON SEPERATE INOVICE REAISED FOR REAL REIMBURSEMENT OF EXPENDITURE

[abbas mukhi]

SIR,

WE ARE ON SOME OCCASIONS INCURRING EXPENDITURE ON BEHALF OF OUR CLIENT, LIKE BOOKING OF ROOMS IN HOTELS, BOOKING TAXI.

AFTER THAT WE ARE CLAIMING ACTUAL EXPENDITURE INCURRED BY US WITHOUT ANY PROFIT WITH ELEMENT THROUGH SEPARATE INVOICE RAISED (WITH SUPPORTING OF ACTUAL EXPENDITURE)

I WANT TO WHETHER SERVICE TAX IS APPLICABLE CONSIDERING THE RULES AND PROVISIONS OF THE SERVICE TAX ACT ON SUCH INVOICES.

THANKS....

AI Summary

Service Tax Not Applicable on Reimbursements for Actual Expenses with Proper Documentation, per Section 65 B(44) and Rule 5. A forum discussion addresses whether service tax applies to separate invoices issued for reimbursing expenses incurred on behalf of clients, such as hotel bookings and taxi fares. Participants generally agree that service tax is not applicable if the reimbursement is for actual expenses without profit and proper documentation is maintained. The discussion references legal provisions, including Section 65 B(44) of the Finance Act and Rule 5 of the Service Tax Valuation Rules, highlighting that such reimbursements do not constitute a taxable service. The consensus is that with appropriate evidence, these reimbursements are not subject to service tax.