TaxTMI 
TaxTMI 
I had entered into contract with state government department.The service tax was not applicable on date of tender.Is the state gov. department liable to reimburse service tax to me?
Service tax applicability
07 Oct 2008 
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Service tax reimbursement: new levies are generally payable by the contracting customer unless contract states otherwise.
Whether a state government department must reimburse service tax paid by a contractor depends on the contract terms determining who bears taxes and whether rates apply as prevailing; absent express allocation, commercial practice treats new levies as payable by the customer, especially where the customer can claim CENVAT, and for a government department statutory liability and the department's CENVAT position will influence reimbursement entitlement. (AI Summary)
Whether a state government department must reimburse service tax paid by a contractor depends on the contract terms determining who bears taxes and whether rates apply as prevailing; absent express allocation, commercial practice treats new levies as payable by the customer, especially where the customer can claim CENVAT, and for a government department statutory liability and the department's CENVAT position will influence reimbursement entitlement. (AI Summary)