2017 (12) TMI 1663 - AT - Service Tax

Valuation - construction activities - inclusion of value of free supply materials received from the recipient of service which is used in provision of services in assessable value - N/N. 1/2006, dated 1-3-2006 - Held that - The Tribunal in the case of Bhayana Builders (P) Ltd. v. Commissioner of Service Tax, Delhi 2013 (9) TMI 294 - CESTAT NEW DELHI (LB) examined an identical situation under N/N. 4/2005-S.T., where it was held that the value of free supplies by the service recipient do not comprise as gross amount charged by the service provider and the Explanation under Notification 15/2004 as introduced by N/N. 4/2005 has no implication for such supplies - Appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT CHENNAI ruled in favor of the appellant regarding the valuation of taxable services. The dispute was about including the value of free supply materials received from the recipient of service. The Tribunal referred to a previous case and held that such free supplies do not comprise the gross amount charged by the service provider. The impugned order was found without merits and was set aside, allowing the appeal.