Service tax on reimbursement

[Guest]

a portion of receipt treated as reimbursement and no service tax paid on it in the year 2006-06. Department now demanding ST on the reimbursement amount.Is there any case laws?

[Ravi Chopra]

Prior to introduction of Service Tax (Determination of Value) Rules, 2006, the position was more or less clear. There was no service tax on reimbursement of expenses. You need to pursue the case with regard to certain circulars and case laws.

AI Summary

Service tax on reimbursements: earlier non taxable treatment contested, requiring reliance on circulars and case law. The note addresses a departmental demand for service tax on amounts treated as reimbursements where no tax was paid; it highlights that prior to the Service Tax (Determination of Value) Rules, 2006, reimbursements were commonly treated as non-taxable and advises reliance on relevant circulars and case law to contest or support the demand.