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No Service Tax on reimbursements prior to May 14, 2015: SC
Case Law Details
- Case Name
- Union of India & ANR. Vs M/s Intercontinental Consultants and Technocrats Ltd. (Supreme Court of India)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- Supreme Court of India
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CA Bimal Jain
Union of India & ANR. Vs M/s Intercontinental Consultants and Technocrats Ltd. (Supreme Court of India)
The issue of taxability of out-of-pocket expenses has always been a matter of litigation. Before April, 2006 there was no specific provision to this effect. However, from April 19, 2006 onwards, with the introduction of the Service Tax (Determination of Value) Rules, 2006, (“the Valuation Rules”) Service tax is applicable on gross consideration including all expenses barring the expenses incurred as pure agent.
The matter of taxability of such expenses,...
Author Info
OFFHAND
Why tax, if ‘reimbursement’ is of ‘actual’, – directly met or not, subject to proving includes no profit/mark-up ?!
ADD -on:
Another aspect calling for a conscious noting /special concerted focus, in the ST/GST regime is, in addition to ‘deeming concept’, the innovative so called ‘negative list’. That is, in modification of the age old concept /device , opted for legislation- namely, ‘an inclusive definition’ , by specifying certain specific items, but leaving all the other conceivable items, open, to be roped in, with the passage of time, on the whim of the legislature, and the taxation authorities, with the blessings of the judiciary,
OFFHAND
This should , most certainly serve the purpose, if nothing else, of sensing, with no efforts, whither / in which direction, the winds are blowing- ‘Rule’ or No Rule!
Incidentally, anyone needs to, like it or not, be wary of the unmistakable reality that the concept of ‘income’ , as opposed to ‘non-income’ (including ‘capital’), has been , over the decades, rapidly subjected to a violent tweaking, now beyond recognition even remotely. To pinpoint, the concept of ‘deeming’ has been found to be a convenient tool /device, for taxing anything and everything; more so, regardless of whether it goes into one’s pocket or not – subject , of course, assuming straight forward and honest accounting for?!