Service Tax is not payable on reimbursable expenses

In the matter related to Clearing and Forwarding Services on the issue of levy of service tax on expenses reimbursed by the client, honorable tribunal has held that the appellants are not liable to pay any Service Tax on the reimbursable expenses.

It was clearly outlined in the contract between the appellant and their principal apart from commission that certain expenses are liable to be reimbursed. They are as follows:

- Accountant salary,

- Godown Keeper,

- Steno,

- Office Maintenance,

- Computer Programmer Salary,

- Computer Installation, etc.

CESTAST has allowed deduction of these expenses as reimbursement of expenses. 

(For full text of judgment - visit 2008 -TMI - 2498 - CESTAT, BANGALORE)