Home Forum Service Tax Month 4 2007 2007 (4) This
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Liability of service tax on accomodation services - Service TaxExtract A Pvt Ltd company is going to execute a contract at a site. as per the agreement, it is the responsibilty of the client to provide accomodation to the people working at site.But the company requested the client that the company will construct its own accomodation at the land belongiing to the client ie erect a temporary shed which will be dismantled once the project is over. the total cost of constructing the temporary structure is Rs 1cr. the client agreed only to reimburse Rs 40 lacs to the company. my query is the company liable to pay any service tax on the Rs 40 lac received from the client. My opinion is that since this being a purely a reimursement of capital expendityre, service tax should not be levied. i need your valuable advice
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