REVERSE CHARGE ON REIMBURSEMENT OF TAXI HIRE CHARGES

[Ashish Chhawchharia]

Dear All,

Please suggest whether service tax is to be deposited under reverse charge mechanism on reimbursement of taxi hire charges to employees on out duty.

[YAGAY and SUN]

Not required, if your employees have hired, Radio Taxi, Meter Taxi or Three wheeler(Auto).

[GANAPATHY RAJENDRAN]

It is reimbursement only . The emplloyer does  not pay  any taxi  bill to Travel agent / tour operator . There is no bill in the name of the company . Hence , no  need to pay service tax on such reimbursement of hire charges

In case there is contract by thrvice providre company with the taxi service provider then there will be reverse charge applicable.If it is a ase of purely reimbursement of taxi hire charges reimbursed to an employee,then reverse charge is not involved

[Ashwani Rustagi]

No service on reverse charge mechanism would be applicable on reimbursement of expenses to the employees.

[Joginder Pal]

I agree with it.

AI Summary

Reverse charge: generally not applicable to employee-reimbursed taxi hire, but applies if the company contracts with the taxi provider.
Reverse charge is generally not triggered when an employer reimburses an employee for taxi hire incurred on out-duty where the employee directly hires a Radio Taxi, Meter Taxi or three-wheeler and the invoice is not in the company's name. If the employer or its contractor has a contract with the taxi provider or receives the invoice, the supply is treated as to the employer and reverse charge may apply.