whether service tax is applicable on esic reimbursment

[Pandit Bhagat]

Dear sir,

Kindly confirm whether service tax is applicable on esic reimbursement from company in separate bill.

Regards,

Pandit Bhagat

AI Summary

Service tax generally not applicable to ESIC reimbursements unless involving contractors supplying manpower. 'Pure agent' principle discussed. A forum discussion debated whether service tax applies to ESIC reimbursements. The consensus among participants was that service tax is generally not applicable if the reimbursement is supported by documentation and pertains to an employer-employee relationship. However, if the reimbursement involves contractors supplying manpower, and the gross amount includes various labor-related costs, service tax may be applicable. The principle of a 'pure agent' was mentioned, indicating that if the contractor pays ESIC on behalf of the company, it might not attract service tax. Overall, the absence of a service element or declared service means service tax is not levied.