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 andSUN]

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

[Guest]

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

Service Tax Not Applicable on Employee Reimbursement for Taxi Hire; Reverse Charge Applies Only with Direct Service Contracts A query was raised regarding the applicability of service tax under the reverse charge mechanism on the reimbursement of taxi hire charges to employees. Respondents generally agreed that service tax is not required if the charges are reimbursed directly to employees for hiring radio taxis, meter taxis, or auto-rickshaws, as these do not involve direct billing to the company. If there is a contract with a taxi service provider, reverse charge might apply, but not in cases of simple reimbursement to employees.