TaxTMI 
TaxTMI 
Whether service tax is payble on the re-imbursement of electricity charges in a housing complex, where electricity charges are collected and paid to the electricity provider on behalf of the residents ?
service tax on re-imbursement of electricity charges
05 Feb 2013 
2 Replies 
1163 Views Asked by
Reimbursement of expenses for third party electricity charges excluded from taxable service value when provider acts as Pure Agent.
Reimbursements of electricity charges remitted to a third party supplier on behalf of residents are excluded from the taxable value when made on an actual disbursed basis and where the provider functions as a Pure Agent under the Service Tax (Determination of Valuation) Rules, 2006; a cited judicial view treats taxing such reimbursements as ultra vires the charging scheme. (AI Summary)
Reimbursements of electricity charges remitted to a third party supplier on behalf of residents are excluded from the taxable value when made on an actual disbursed basis and where the provider functions as a Pure Agent under the Service Tax (Determination of Valuation) Rules, 2006; a cited judicial view treats taxing such reimbursements as ultra vires the charging scheme. (AI Summary)