Service Tax on reverse charge method - reg.

[vinay wakde]

The service provided by an individual Advocate &  the  service receipient is company then Service Tax is required to be paid by the service receipient  under reverse charge method w.e.f. 01.07.2012.  My query is whether the company has to pay service tax to the extent of fees paid to the advocate or also on other expenses re-imbursed by the company (such as trivelling, fooding expenses etc.).  

Regards,

VINAY

[YAGAY and SUN]

It gona to be paid on the gross amount including travelling, fooding and outofpocket expenses.

[Harsh Jindal]

Everything will be included in the gross amount charged for service tax i.e. fees paid to advocate, travelling expense, fooding expense etc.

[SANJIV KOTHARI]

Service tax is payable only on fee part. There is no service tax on reimbursement part. It is better that advocate must submit two bill one for fee and other out of pocket expenses.

AI Summary

Reverse charge service tax: company liable for advocate fees and potentially for reimbursed expenses unless billed separately.
Reverse charge applies to a company receiving services from an individual advocate; the contested issue is whether the taxable base includes only professional fees or also reimbursed out of pocket expenses. Two replies treat the taxable value as the gross amount including travel, food and reimbursements, while one reply limits tax to the fee and advises separate bills for fees and reimbursements.