Delhi High Court, in a recent landmark judgment in Intercontinental Consultants and Technocrats Pvt Ltd v Union of India & Anr, has struck down the provisions related to service tax on reimbursement of expenses.
The petitioner company provided consulting engineer services and received payments not only for its services but also for its expenses such as air travel, hotel stay, etc. It was paying service tax in respect of amounts it received for services rendered to its clients but not in respect of expenses which were reimbursed by the clients.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
