Service tax on expenses towards sharing of Employees and infrastructure of other company

[Shailesh Mehta]

A company 'A' utilizes services of employees and infrastructure of Company 'B' and in turn reimburse the actual cost to the company 'B'. Is company 'B' liable to pay Service tax on the amount received from 'A'.

AI Summary

Reimbursements for Employee Use Considered 'Supply of Service' Under Section 7(1)(c) of CGST Act; GST Applicable A company 'A' reimburses the actual costs to company 'B' for utilizing its employees and infrastructure. The question is whether company 'B' is liable to pay service tax on these reimbursements. The consensus in the discussion is that under the current Goods and Services Tax (GST) framework, such transactions are considered a 'supply of service' as per Section 7(1)(c) of the CGST Act, making company 'B' liable to pay GST. However, if the query pertains to the previous Service Tax regime, no service tax would be applicable on such transactions.