Service tax cannot be demanded on reimbursement of expenses post May 1, 2006

KFin Technologies Private Limited Vs Commissioner of Central Tax (CESTAT Hyderabad)

Conclusion: Service tax had to be levied only for consideration received for service, therefore, the entire demand of service tax on reimbursable expenses collected from clients for the period post 1.5.2006 was set aside. However, to the extent assessee had collected any amount representing service tax on such expenses and interest thereon from clients, the same need to be deposited with the Government in terms of Section 73A

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