TaxTMI 
TaxTMI 
A C&F agent having service tax registration has not paid the service tax on reimbursement charges received from the principal in lieu of providing them transportation facility. The contention of the agent was that the service tax was already paid by the principal however, they have not provided any proof of service tax payment made by the principal. Sir, whether the agent is liable to pay service tax on the value paid by the principal against providing them transportation facility.
reimbursement on transportation charges
19 Apr 2025 
5 Replies 
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Reimbursement for transportation: taxable unless proven paid by principal or shown to be a pure agent exception.
C&F agents receiving reimbursements for transportation are taxable on those amounts unless they prove the principal already paid tax or that they acted as a pure agent. Documentary proof is required to shift liability; absent such proof, authorities may assess tax, interest and penalties. Established findings indicate actual reimbursible expenses incurred for handling or delivery, when shown to be such, need not be included in the agent's assessable value, but characterization and factual arrangements determine applicability. (AI Summary)
C&F agents receiving reimbursements for transportation are taxable on those amounts unless they prove the principal already paid tax or that they acted as a pure agent. Documentary proof is required to shift liability; absent such proof, authorities may assess tax, interest and penalties. Established findings indicate actual reimbursible expenses incurred for handling or delivery, when shown to be such, need not be included in the agent's assessable value, but characterization and factual arrangements determine applicability. (AI Summary)