dear experts,
We have hie bus for transportation of our employees
as per terms of contract we are reimbursing passenger tax to service provider apart from rent
i want know whether service tax is payable on passenger tax also (under RCM) ?
i have read definition of consideration as per explanation (a) to section 67 and relevant judgment but could not arrived at conclusion as sometimes reimbursement is included and sometimes not..
Reimbursed Passenger Tax Exempt from Service Tax According to 2011 CBEC Circular; Not Part of Taxable Value A forum participant inquired whether service tax is applicable on reimbursed passenger tax paid to a service provider for employee transportation. Experts responded that reimbursed taxes should not be included in the taxable value for service tax purposes, as taxes are paid to the government and not retained by the assessee. A CBEC circular from 2011 was cited, clarifying that similar taxes, like luxury and value-added taxes, are excluded from taxable value. Despite amendments to the definition of 'consideration,' the circular remains relevant, confirming that reimbursed passenger tax is not subject to service tax. (AI Summary)
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