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Service tax on reimbursement expenses : 7 imp points

The finance bill 2015 has made amendment in section 67 regarding service tax on reimbursement expenses. In this article, you can get detailed explanation about the implication of this amendment on service tax value and service tax liability.

Service tax on reimbursement of expneses – 7 important points –  budget 2015 updated:

I am receiving lots of queries about service tax value and taxability of service tax on my blog. Determination of service tax taxable value requires understanding of service tax valuation rule 67.

  1. Service tax valuation rules.
  2. What is out of pocket or reimbursement expenses?
  3. What is pure agent service?
  4. Decision of delhi high court with regards to reimbursement of expenses.
  5. Budget 2015 update about reimbursement of expenses
  6. Effect of change in budget 2015 on service tax value

Service tax valuation rules:

Chargeablitiy of service tax is determined by negative list of services and exemptions. Once the service is not in those list, service becomes taxable. Once we decide that the service is taxable. Second step is to determine value of taxable service which is based on invoice. We are required to examine various elements like cenvat credit, value of sales on which vat is levied, out of pocket expenses, amount paid as pure agent to other party and after that taxable value of service tax is determined.

I am not writing here more details about service tax valuation rules because separate article will be published on this matter.

What is out of pocket or reimbursement expenses in service tax?

Hotel expenses, travelling expenses etc which are done by service provider in the course of providing taxable services are out of pocket or reimbursement expenses.

Example:

Mr. Patel is providing  construction service. He is hired by  Mr. jay to construct his plan for Rs. 2 crore and other reimbursement expenses done by Mr. Patel will be paid extra.

Now, Mr. Patel incurs Rs. 5000 for travelling for visiting of Plant. In this case, Rs.5000 amount is out of pocket or reimbursement expense.

What is pure agent service?

People are considering reimbursement expenses and pure agent service as same. Actually it is not. It is necessary to understand concept of pure agent service in service tax to determine right value of taxable service.

Pure agent definition :

“pure agent” means a person who –

(a) enters into a contractual agreement with the recipient of service to act as his pure agent to incur expenditure or costs in the course of providing taxable service;

(b) has not hold or has not intention to  hold any title to the goods or services so procured or provided as pure agent of the recipient of service

(c) does not use goods or services received like this

(d) receives only the actual amount incurred to procure such goods or services.

 

As per Rule 5(2) of the valuation rules provides that

expenditure or cost that service provider incurs , as pure agent on behalf of the client, shall be excluded from the value , if service provider fulfill  prescribed conditions.

  1. the service provider is acting as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured;
  2.   service receiver receives and uses the goods or services.
  3.  the service receiver is liable to make payment to the third party and not service provider. It is better to include this in agreement.
  4.  the service receiver authorizes the service provider to make payment on his behalf
  5. the service receiver knows that the goods and services for which payment has been made by the service provider shall be provided by the third party;
  6. the payment made by the service provider on behalf of the recipient of service has been separately indicated in the invoice issued by the service provider to the recipient of service;( Separate indication is necessary)
  7. the service provider recovers from the recipient of service only such amount as has been paid by him to the third party ( No additional profit should be charged ) and
  8. 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.

Examples of Pure agents ;

  1. Octroi or entry fees paid by C&F agent, CHA or transporter on behalf of owner of goods.
  2. Expenses incurred by C&F agent and reimbursed by principal such as freight ,labour, godown charges and loading and unloading charges.
  3. Custom duty, dock dues, transport charges paid by CHA on behalf of client.

In view of the above prospective, one must have the following arrangement ;

  1.  Contractual arrangement : this does not mean in writing as the contract act does not requires that agreement should be in writing. However it is advisable to have simple agreement for the services to be rendered as agent on behalf of the client.
  2. Disclosure to Act as agent.
  3. Break up of consideration is not relevant.
  4. Do not charge profit on the expenses you incurred as pure agent.
  5. Disclose separately in the bill that the payment is made on behalf of principal and you are working as agent.

Decision of Delhi high court with regards to reimbursement of expenses:

case : intercontinental consultants and technorats ( P.) LTD vs. Unon of india,

the petitioner filed a writ petition before the High Court for quashing the show cause notice issued by the Service Tax Department for recovery of Service Tax on amount received as reimbursement of expenses such as hotel accommodation and  travelling etc. under service tax Rule 5(1) , 2006.

The Hon’ble Delhi High Court while deciding the petition held as follows:

  1.  Rule 5 (1) of the Rules is ultra vires section 66 and section 67 of the Finance Act, 1994 since it travels beyond the scope of the aforesaid sections.

  2. The expenditure or costs incurred by the service provider in the course of providing the taxable service can never be considered as part of the gross amount charged by the service provider for the services provided.

  3. The reimbursement of expenses for air travel tickets, hotel accommodation, etc. may also lead to double taxation.

 The Delhi High Court decision was in favour of the Assesse, the department has filed an appeal to the Supreme Court against the decision of the High Court which is pending for disposal.

Budget 2015 update about reimbursement of expenses:

Budget 2015 has amended section 67  to include reimbursement of expenses in the value of taxable service.

Extract of budget 2015 speech regarding above change:

109. In section 67 of the 1994 Act, in the Explanation, for clause (a), the following clause shall be amended:

‘(a) consideration will include

  1. the amount that is payable for the taxable services provided or  which is likely to be provided
  2. any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such prescribed conditions
  3. any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission or the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket.’.

You can read budget speech from this link.- budget 2015 pdf.

Effect of change in budget 2015 on service tax value:

After amendment, it is clear that reimbursement of expenses in the provision of service should be included in the total value of taxable service except it is specifically excluded.

Is it requred to include Reimbursement of expenses  in the value before the amendment? It is still dependent on hon able supreme court’s decision and it is still pending.

As service provider, you need to include reimbursement expense like accomodation charges, travelling charges etc. in bill and charge service tax to its value. However, do not include the expenses which you have incurred as pure agent.

Example:

Mr. Pranay ( CHA service provider) has charged Rs. 120000 to Mr. Janak.Components of which are

ComponentsRs.
Agency income20000
Travelling expenses and accommodation charges20000
Custom duty paid60000
EDI expenses20000

 

In this case, value of taxable service provided is Rs. 20000+Rs. 20000 = Rs. 40000.

The components are required to shown separately in bill and indicating pure agent services.

I have tried to cover all the points regarding service tax on reimbursement expenses. Still if you have questions or views, express through comments below. Don’t forget to share this post on social media to encourage me to write more.

 

 

 

 

79 Comments

  1. Dear Mam,

    Your article was helpful to me in understanding the pre and post scenario of service tax valuation rules.
    But still I have this query unsolved which needs some attention –
    The Budget 2015 has amended the Section 67 to include reimbursements but what about the cost that we incur as pure agent now? Are we to charge service tax on that too?
    For example, if we talk about professionals like CA and CS, we do bear certain expenses on behalf of client like travelling, ROC Filing fees, Stationery, Notarisation charges etc then are we to charge service tax on these expenses even if these have been charged as per actuals and no margin of profit is claimed?

    • By admin

      Pure agent service is not taxable. So if you pay ROC filling fees on behalf of client, it is not covered under service tax but if you pay travelling expense to provide service to client, it is taxable.

      • Can you please specify where from have you derived the conclusion that Pure Agent Services are not taxable. Is it mentioned in the Budget Section 67?

  2. good article about re-imburesement of expenses.

    • By admin

      Thank you.

      • By Shashi Mohan

        Its very useful article. I have a general querry. Many business centres pay a consolidated bill of electricity (genset/state supply) to their landlord (say DLF) and charge back proportionate amount from their tenents, through sub-meters installed.
        There is no component of profit in the charge. There is also no option on part of Business Centres/Tenentd to install their own generators. Electricity is essential, in order to provide services of a business centre.
        Are business centres liable also to charge Service Tax from their tenants on such reimbursements? Please advise
        Regards/Shashi Mohan
        shashimohanca@gmail.com

      • By admin

        No, it is pure agent service and you need to indicate it in bill.

      • By yadhu

        nice article madam

  3. By kuntesh

    very nice!
    explained in easy and simple language..

    • By admin

      Thank you for appreciation

  4. By Sangeet Kr Gupta

    Excellent Article, Comprehensive, Appreciated and i have shared it , with link to your site, on my Facebook, Twitter and also Google Plus.
    Keep it up

    • By admin

      Thank you very much. You help me a lot.

  5. By Vinod Kumar

    Dear Madam,

    Your article is very very helpful.

    We incurred Hotel stay expenses while doing an AMC.

    Now we are reimbursing the actual hotel stay expenses. Hope we have to charge service tax for Hotel Stay expenses.

    Regards,
    Vinod Kumar

    • By admin

      It should be included in taxable value and service tax should be charged on it.

  6. By Girish Patel

    Hi,Mam,
    we are Pvt. Ltd. Company & we are receiving Rent a cab Service (Vehicle Hire Charges) The Service Provider Charge Toll tax & Other Parking Expenses as a reimbursement in his bill so this reimbursement is taxable in this case.

    Second query Regarding our consultant for reimbursement of expenses if they do not charge reimbursement in the bill & collect it by raising Separate invoice so what about service tax

    Regards
    Girish

    • By admin

      Understand concept, service tax will be applicable on services used in providing service. Exemption is only for pure agent service.

      According to me, in both cases, in both cases, service tax will be levied.

      • By Girish Patel

        Thanks

  7. By Prathamesh

    Hello Madam, its nicely explained the concept of pure agent and recent amendment regarding service tax on reimbursement of expenses.
    In case of one of my client, my client is a subsidiary of foreign holding company. Now subsidiary is incurring different cost for holding company such as
    – Purchase of material for the holding company project when required and taking reimbursement of the same without any profit margin.
    – buying air tickets for the holding company personnel travelling to India for the project of holding company.
    – Incurring legal expenses for the holding company
    – incurring advertisement expenses for the holding company

    In all the above expenses there is no profit margin in reimbursement invoice raised.

    Thus in my opinion, there won’t be service tax as the same is not provided in the course of service.

    It will be helpful, if you confirm my view.

    • By admin

      Actually sir I can’t confirm on any matter because the website articles are my opinions and not conclusions.

      However, if you ask my view, it should not be covered under service tax as it seems totally pure agent service.

  8. By Venkat

    Hi Tarannum,

    I am a service recipient and my service provider (SP) had made some procurements on my behalf in the month of March.

    SP has procured the goods from other local vendor, say, Mr. X for Rs. 1000 (the bill doesn’t include VAT separately)

    Now SP has raised a bill for the above service. He shows Rs. 100 as cost of procurement + 100 as service charges (10% of procurement cost).

    He charges 12.36% of ST on 1100.

    He annexes the invoices provided by Mr. X to his invoice to justify the correct claim.

    My query is, will ST apply on 100 or 1100?

    Regards

    Venkat

    • By admin

      As he is charging extra Rs.100, he is not acting as pure agent and you need to pay service tax on Rs.1100.

  9. By Ankit Doshi

    NIce Article.

  10. By Naushad Khan

    Dear Mam,

    In CHA Firm Received Commission or Refund on Frieght are exempt or not?

    • By admin

      Taxable.

  11. By ravi

    Dear Mam,

    Reimbursement of tds paid on behalf of client is taxable or non taxable…..?

    • By admin

      Not covered under service tax.

  12. By Aman Kumam Mittal

    Ma,am i have a doubt I am a Individual Sole Propreitor C &FA Agent of a Co. , on the course of providing Taxable services i buy Assets on behalf of the company and get it reimbursed by the company, Further I have no Control on the Assets but use it in Providing Service so whether Service is required to be charged on bill raised for Reimbursement of Assets…..???

    • By admin

      If you purchase the asset and hand over to clients without adding margin, it is not covered under service tax. However, if you are using the asset in provision of service and recovered from the client its value, it is covered under service tax.

  13. By Thomas

    Madam, This article gives me solution to an issue which was worrying me for the last six years.

    • By admin

      Glad that it helped you.

  14. By sameer

    How can I see my post and subsequent replies from your blog.

    • By admin

      You will receive email when we reply. However, all the comments are first in waiting for our approval.

  15. By SATYA I

    DEAR MADAM, I HAD ONE QUERY ABOUT SERVICE TAX PURE AGENT

    IF ANY ONE ACTS AS PURE AGENT TO US , THEN HE CLAIMS ONLY THE ACTUAL EXPENDITURE INCURRED

    BY SHOWING THE BILLS . IN THAT BILLS , IF HE PAID ANY SERVICE TAX TO THIRD PARTY THEN WHO ARE

    ELIGIBLE TO CLAIM INPUT TAX CREDIT I.E PURE AGENT OR US

    • By admin

      You are eligilbe to avail cenvat credit. Please collect invoice on your name from the supplier. ( Agent is only acting on your behalf.)

  16. By rajesh

    Madam One of my client a service provider is receiving certain charges from the receiver of the service for the amount received by them as lease of the land given to domestic consumer, is this taxable

    • By admin

      If lease is received as pure agent and reimburse to landlord, it is not covered under service tax. However, it needs more clarity in question to give exact answer.

  17. By Nayak.brs

    good article about reimbursement of expenses

    thanks a lot

    • By admin

      It is our pleasure that it helps our readers.

  18. By Amiya Dey

    Dear Madam, I am in C &F Agent Pvt. Ltd Co. We are providing Service like Loading & Unloading, Transportation, Purchase of Stationery on behalf of service recipient, I am asking that service tax will be charged on reimbursement of expense??

    • By admin

      Only charge service tax on agency charges of your company.

      • What if in this question,

        ” Dear Madam, I am in C &F Agent Pvt. Ltd Co. We are providing Service like Loading & Unloading, Transportation, Purchase of Stationery on behalf of service recipient, I am asking that service tax will be charged on reimbursement of expense??”

        C&F Agent Pvt. Ltd charges nominal profit on Reimbursement charges..?

      • By admin

        Do not charge nominal profit on reimbursement expense otherwise it will be covered under service tax.

  19. By prateek

    DEAR MADAM, I HAD ONE QUERY ABOUT SERVICE TAX
    WHETHER SERVICE TAX WILL BE CHARGED ON THE REIMBURSEMENT OF EXPENSE OF YEAR 2014-15. THE BILL FOR THE SAME IS RAISED TODAY.

    • By admin

      Service tax should not be charged on reimbursement expense.

  20. By Kailash Gupta

    Dear Madam,

    We are Social Media Marketing firm. We are providing website and advertising services. We pay for ad spent on behalf of our client and charge the same without any profit from client. I am asking that whether Service Tax will be charged of reimbursement of Ad spent.

    Thanks

    • By admin

      As per my view, it is reimbursement expense and service tax should not be charged on that amount.

  21. By Mahendar

    Very nice article, i have one query if within group company one company incurred some expenses and after that cross charge to other group company without any margin do service tax needs to be charged??

    • By admin

      No need to charge service tax. Take bill on the name of the company who is receiving the benefit.

  22. By MOHAN R

    One question from me Madam.
    We do export of our finished goods to overseas country. The customer finds some fault on the Finished goods supplied by us. He engaged job worker at his end and rectified the same. he incurred some expenses. in turn , he raised a debit note to recover the same. But we do not know whether he charged the actual expense or more. In this situation , whether we need to pay any service tax under RCM. Please detail me.

    • By admin

      If service is rendered outside India, there is no question of service tax.

  23. By Chirag Nayee

    Dear Madam, Whether the service tax paid by service receiver is eligible as input credit for service receiver? e.g. If a consultant provide service to company and raise bill including reimbursement of expenses,(Consultancy fees 50,000+taxi bill 5,000) and charge service tax on total bill amount(55,000), whether service tax credit is eligible for total service tax(55,000*14%=7,700) or part of service tax excluding portion of reimbursement(50,000*14%=7,000)?

    • By admin

      Taxi bill is expense for the provision of service and it can not be considered expense as pure agent. So correct amount for taxable value is Rs. 55000.

      If service provider has used any service for provision of service then it will be input service for him and he can take cenvat credit of it.

      Example,

      In your case, suppose you get consultancy service of Mr. X worth 11450 ( 10000 + 1450 -14.5% S.Tax) to provide service to company then You can get cenvat credit of 1450 for that service and utilize while paying service tax.

  24. By ramesh

    Dear Mam

    Firstly thanks for your understandable article.
    We are shipping company and we give ship management service to client/ship owners. but we incur some expenses like:
    1) Travel/accomodation/food expense during the ship visit (office to ship place) and same expenses claim from ship owner on actual.
    2) expenses pay for machinery parts and others expenses on ship and same expenses claim from ship owner on actual

    Please advice for service tax liability on above 2 points

    thanks in advance

    • By admin

      As per my understanding,

      Expense paid for point 1 is related to provision of service and will need to be included in service tax value

      Expense paid for machinery purchase which is total pure agent type, will not be included in service tax value.

      I request you to read full article to understand types of various expense.

      • By ramesh

        thanks for your reply.
        Please share article with me

  25. By srinivas

    Dear madam, We r individual having shopping complex. we purchased generator for giving power back up to them. now we want to reimburse the cost of generator from the tenants/ lessee. is service tax apply for that. some tenants want to give dg cost of his contribution at a time and some partly per month. please give reply. thx

  26. Dear Madam – We Provide Maintenance services to Telecom Operators under an Agreement which is silent on its being Principal to Principal or Principal to Pure Agent. Our Rate includes Salaries of Techs, Managers, Office Exp, Vehicle Exp, Interest on WC and Margins. The agreement also shows this Rate say Rs. 2000/Site and we have approx 1000 sites which keeps increasing eveyr month. As such we raised Tax invoice for 1st month for Rs. 20 Lac + ST 14% + SBC 0.5%. This is alright. Further we have to also buy and supply Diesel for the DGs at sites, Pay Rents and Electricity Bills for the sites owned by the said Customer. Here we raise another Invoice for Rs. 10 Lac as Stating it as “DN” and in particulars we write DN Reimbursement Exp. Now my queston is if the 2nd Invoice can be braught under ST rules and we need to pay ST on the same when the agreement does not clearly state wheather we were to carry out such services on a pure agent basis whicle providing Taxable Services.However the Customer is receiving such DNs and paying them also.

    • By BASANT PARAKH

      Dear Madam – You r comment is eagerly awaited since my job is at stake.

      • By BASANT PARAKH

        Sorry ! I am talking of 2010-11-12 and on maintenance service bills we had charged 12 + 2 +1 % Tax but the DNs went without ST which even the customer kept accepting and paying.

  27. By Arup kr ghosh

    My company has provide renting of immovable property, and we have charge electricity to tanants and claim reimburshment this charges , is this service tax applicable ???

  28. By BABU

    Dear Madam

    Service Tax and TDS on Leasing Charges of CAR to Company

    My company is making payments for services of leasing car to employees through their family members.

    The bill includes actual EMI paid to Bank and other actual car maintenance expenses with bill.
    There is no margin or markup on the car leasing bill raised on the company by these family members.

    Does Service Tax and TDS applicable in these case?

    Many Thanks for your reply.

  29. By Harikrishna Boga

    Dear Madam,
    We are into CAMC Business, we are provding the Mobile Facilities to our Chanel Partner on PAN India Basis, All Mobile Usage provised are billed to our Company. So at Month end when we receive the Mobile Charges for that Month, we remiburse the same aganist each Channel Partner. My question is whether Service Tax is Liable to Charge on such reimburesment. Kindly Advice

  30. By Rohit

    Hi Mam,

    I have a confusion. We have a HR consultancy (assume name is ABC) who provides us with employees. We pay salary and bonus of these employees to ABC who in turn pay to the employees. Also when employees incurres their out of pocket expenses, they raise claims which are again paid to the ABC which reimburses back to the employees

    Whenever ABC raise an invoice on us, they charge us with salary/bonus + Agency fees + service tax on total amount

    I am not able to understand whether they should charge service tax on total amount or only agency fees

    Please help

    • By Subhasish Paul

      They are rightly charging service Tax on total amount. Amemded provisions on Sec 67 of Finance Act expressly includes ‘any expenditure or costs incured by service provider in the course of providing or agreeing to to provide taxtable service’ are now part of total value of consideration.

      CMA Subhasish Paul.

  31. By Anurag Lal

    Wonderful write up Mam. I really appreciate your efforts to the fraternity. Indeed the words “except in such circumstances, and subject to such conditions as may be prescribed” means the exclusion of Reimbursable expenses billed as Pure Agent. Thank you again for your labor.
    Regards
    FCA Anurag

  32. By Rajiv

    Ma’m,
    My question is about applicability of reverse charge on reimbursement of expenses. The service provider is a provider of manpower services to a company ABC. Every month the service provider raises an invoice for service provided based on rate per month per worker x no of mandays on which ABC accrues service tax on reverse charge basis. Kindly confirm if reverse charge on service tax shud be accrued by ABC on invoice raised by service provider for reimbursement of premium on Workers Compensation Policy. Service provider is a labour contractor and the workers are on his payroll and not on the payroll of ABC.

  33. By Priyanga

    Dear Madam,

    Please clarify my doubt mam, whether service tax is applicable for conveyance charges , we are the service provider how to raise the invoice for conveyance charges how many percent of service tax for conveyance.

  34. By LORENCE M P

    Madam, Your articles on Service tax is very helpful. I need some clarification on the bill raised by my Clearing Agent. They clear export consignment from customs and sent to gateway ports through rail (CONCOR) for which they pay the rail freight on our behalf and ask for re-reimbursement from us. They mention the full value of CONCOR bill (Inculding service tax) in non taxable column and submit the bill to us along with the original Bill of CONCOR without mentioning actual amount and service tax separately in Agent’s Bill. As a result we are not in a position to take cenvat credit of the service tax paid by CONCOR as we are not directly paying to CONCOR even though CONCOR bill shows our name as shipper. When we raised this point with the agent, they told us that since CONCOR bill shows our name as shipper and since they do not add any profit for them, we can take that service tax amount into our Cenvat credit even though we are not directly paying to CONCOR and our agent is acting as a Pure Agent. Kindly advice if we can take the service tax amount charged by the Service Provider (CONCOR) to our cenvat credit based on the original bill of CONCOR which shows shipper as us and paid party as our Agent (though we are paying to CONCOR through our agent and not directly)

  35. By MOHAN R

    I INDENT TO RECEIVE ALL PUBLICATIONS FROM TAXMASALA. HOW TO GET IT

    • By admin

      subscribe to our blog by entering email address in sidebar widget.

  36. By Manoj Bhatt

    We have procured Assests Fire Hydrant tank in our plant from supplier in Chennai. Now in Bill the supplier had charged Service tax for Transportation from Chennai to Nagpur. Should we reimbusred the transporation charges with ST?

  37. By ALOK

    WE GET WORK USD AS AN INCENTIVE FROM FOREGN COMPANY IN RELATION OF GOODS IMPORTED BY INDIAN COMPANY.. WHETHER S.TAX WILL BE RECOVERED FROM FOREIGN CLIENT?

  38. By MOHIT TANDON

    Madam
    In Cases where a Builder undertakes construction activity on a professional basis. inures Expenditure on Raw Material Like Cement , Bricks etc besides other Direct & Indirect Expenditure and later Bills it to Client in the following manner :
    Expenditure Incurred on Behalf of Client :
    Material : 200
    Direct Exp : 100
    Indirect Exp : 50
    Markup (Profit) 50
    What should be the Service Tax in the bill based on reimbursement of Expenditure discussion : Any other manner in which the bill can be prepared.
    Thanks & regards

  39. By MOHIT TANDON

    In continuation to the above query Can the Builder Bill under Works Contract Category as under:
    Gross Bill
    Material With VAT Details ( Identifiable) 200
    Direct Exp ( Identifiable) 100
    Indirect Expenses (Identifiable) 50
    Proftt Markup 50
    Service Tax on Profit Markup 14.55 i.e 7.25

  40. By Akshita Goel

    Hi.

    What about the cenvat credit availability of tax amount paid on such reimbursements? Would that service tax amount be eligible for taking cenvat credit ?

    Thanks in anticipation.

  41. Ma’am,
    Basically I came to a conclusion that the taxability is determined by the party to whom the expense bills are addressed.
    If it address directly to the SR, then it is not taxable in the hands of SP since SP is just a middle man.
    Thank you.

    • By admin

      Agree with you sir.

  42. By Renu P Kurian

    Haii Madam,

    Whether Service Tax applicable on Salary reimbursement ?

    My present company demands three months salary or advance notice for resignation. But I could execute one month notice only and balance payable in cash. Now company charges additional 15% Tax as service Tax. Is it correct with Law ?

    Please clarify me.

    regards
    Renu

    • By CA Tarannum Khatri

      Renuji,

      Service tax is not applicable on salary. There is no service tax applicable if employer and employee relation exists.

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