can we take ST paid in Reimbursement Expenses.

[Mahendra L]

Dear Sir.,

We are Reimbursement the travel expenses to the Marketing executives. In that Expenses we have ST, Vat. Now can we take this ST paid (reimbursed to employees Included in bill amt) for the purpose of CENVAT credit.

Eg: Hotel Bill for 2days -10000

ST (14%) 1400

Swachh bharath Cess(0.5) 7

Total 11407

Can we take this ST ₹ 1400 and Swachh bharath Cess ₹ 7 for CENVAT CREDIT.

Please clarify me with latest Cenvat credit Rules.

Thanking You.,

Regards.,

mahendra.L

[Ganeshan Kalyani]

No you cannot take the credit. The expenses were not incurred by you. You have just done reimbursement.

[Akash Deep]

yes you can take the credit.

[KASTURI SETHI]

The amount reimbursed was spent by employee on behalf of the firm. Hotel bill should be in the name of the firm in order to avail cenvat credit of ST paid. (Name of employee who stays in the hotel can be mentioned in bracket just for verification purpose.) No credit on SBC. It is natural that other conditions are to be fulfilled i.e. Input service is required to used for providing taxable output service etc.

[Mahendra L]

If the Hotel stay Bills and Restaurant Bills in the name company then can we take CENVAT Credit.

[Mahir S]

Yes, if it has nexus with the manufacturing activity and services used for business.

[Mahendra L]

But is it better to reimburse the expenses, claim as expenses.

AI Summary

CENVAT credit eligibility for reimbursed travel expenses depends on invoice name and nexus with taxable activity. Whether CENVAT credit can be claimed for service tax and related cess on travel reimbursements hinges on documentary and nexus conditions: bills should be in the firm's name (employee may be shown in bracket), the service must be used for taxable output or manufacturing activity, and standard input-service conditions must be met; one respondent indicated Swachh Bharat Cess is not eligible for credit, while alternative treatment is to record such amounts as reimbursed expenses.