I am working in a leading financial PSUs of India. As per Leave Travel Concession Rule, the reimbursement is made according to AC 2 tire train fare but when we travel by car, that is also reimbursable according to that rule. But, the approved travel agency of our PSU is charging service taxes on the amount and that is not reimbursed by the office. My question is why the employee will borne the service tax when the contract had been made with travel agency and that (service tax to be borne) is not conveyed to the employee. In my opinion, it is a violation of breech of contract. Please suggest me whether it is true from legal point of view?
2 Answers from Attorneys
You have to pay service tax.
Not only as per your company rules even th egovernment offices are reimbursing the travel charges but not service charges charged by the travel agent for that matter you are,by statute,supposed to pay service tax.Its not a violation of the company at all.
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