Reimbursement of expenses Import of Service- Service tax chargeability, Service Tax

[SANDESH SHINDE]

Dear Sir,

Is Service tax chargeable on reimbursement of expenses in case of import of Service. Service such as a video conference was held in the Ho office of Mumbai and for the authority for SYSTEM USAGE CHGS-VIDEO CONFERENCE SYSTEM WITH our Parent company (Japan) charges were paid. Please explain regarding this, Pls give any reference regarding this. Thanks and regards.

Posts / Replies

[YAGAY AND SUN]

Yes, from this budget reimbursement of expenses would be added in the taxable amount to calculate and payment of service tax.

[Manoj Agarwal]

The Valuation rules are same for import of service and domestic services. The proposed amendment in section 67 of the Finance Act has the effect of nullifying the Delhi High Court judgment in the case of Intercontinental Consultants and Technocrats which held in favor of assessee regarding reimbursement of expenses.

So, after the Finance Bill 2015 is enacted by the assent of the President, reimbursements except as 'PURE AGENT' shall be chargeable to service tax.