TaxTMI 
TaxTMI 
TaxTMI 
Inclusions / Exclusions of certain expenditures or costs – Reimbursement of expenses / pure agent
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.... where: - General Provisions - all cost or expenditure shall be included - rule 5(1) Rule 5(1) provides that, Where any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of chargin....
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....ed in detail with illustration. ============== Guidance Note 8 of the Education Guide [CBEC] - Valuation 8.5 Inclusion or exclusion from value of certain expenditure or costs borne by the service provider. Rule 5 of Service Tax (Determination of Value) Rules, 2012 lays down the details of expenditure and cost borne by the service provider which have to be included or excluded while determining....
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....ule (2) of Rule 5 the expenditure or cost incurred by the service provider as a pure agent of the recipient of the service shall be excluded from the value of taxable service if all the following conditions are satisfied: ♦ the service provider acts as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured; ♦ the recipient o....
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....hird party; and ♦ the goods or services procured by the service provider from the third party as a pure agent of the recipient of service are in addition to the services he provides on his own account. 8.5.3 What is the meaning of pure agent? Pure agent has been defined in Explanation to sub-rule 2 of Rule (5) of the Valuation Rules as a person who- ♦ enters into a contractual ag....