Service Tax

P.C. Joshi (Querist) 24 September 2009 This query is : Resolved
I have a query with respect to charging of service tax on reimbursement bills by the service provider. Facts are:

A company hires an agency to manage an event of press confrerence at various locations on occasion of launch of a new products. The agency get fixed consultancy charges and reibursement for travelling and other expenses which it incurs to ptovide the service. The agency has issued bills for consultancy charges as well as the reimbusement of expesnes attaching all the supportings and charging service tax on all the bills including reimburement bills.

Can anyone suggest whether the agency is justified in charging service tax on reimburement biil on which service tax has already chrged by the third party. In my opinion there is no service tax applicable on reimbursement bills.

Pls revert urgently.

Regards

P.C. Joshi
riven

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Raj Kumar Makkad (Expert) 24 September 2009
You are absolutely right. The service provider has got no right to charge service tax on the bills/charges of traveling etc. Reimbursement charges have nothing to do with their service hence no service tax chargeable even.riven