Service Tax on amount recovered from employees

[HCL Infosytems Ltd.]

Dear Sir,

 

Our company is providing Transport facility to employees, Buses will be taken on rent by the company. Comapny will bear 50% of the cost & rest 50% will be recovered from the Employees.

My query is whether these services will be taxable, if yes then under which category.

Thanks.

AI Summary

Taxability of employer provided services: employee recoveries for transport are taxable unless exempt or provided free.
Amounts recovered from employees for employer provided transport are taxable where the service is provided for consideration-whether by direct payment or salary forgone-and employees are treated as service recipients; valuation rules apply and Cenvat credit for inputs and input services used is eligible. Conversely, services made available to all employees free of charge without salary reduction remain outside service tax. Employers must assess whether recoveries fall within taxable services, exemptions, or the Negative List and account for recoveries as either taxable receipts or reductions of expense accordingly.