SERVICE TAX ON REIMBURSEMENT OF ELECTRICITY CHARGES

[SUMEDH AYARE]

I AM A SERVICE RECEIVER. 

WE HAVE TAKEN NEW OFFICE & B.E.S.T IS ISSING ELECTRICITY BILL IN FAVOUR OF XYZ  &  XYZ IN TURN ISSUES BILL IN OUR FAVOUR BY CHARGING SERVICE TAX. (SINCE THE METER IS NOT IN OUR NAME - IT WILL TAKE SOME TIME)

WHETHER I AM LIABLE TO PAY SERVICE TAX ON REIMBURSEMENT OF ELECTRICITY CHARGES TO XYZ.

AI Summary

Reimbursement of actual electricity charges not liable for service tax, as clarified in recent Intercontinental Consultants ruling. A service receiver inquires about the liability to pay service tax on the reimbursement of electricity charges to a company named XYZ, as the electricity bill is issued in XYZ's name. The response clarifies that if the reimbursement is on an actual basis, there is no need to pay service tax, referencing a recent judgment in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India.