2018 (7) TMI 267 - AT - Service Tax

Valuation - reimbursement of expenses - includibility - Whether the appellant, who is acting as a clearing and forwarding agent for the principal and is discharging service ta on the commission so received by them, is liable to include the reimbursable expenses in the value of the services and to pay further service tax in respect of the same? Held that - the issue is no more res integra and stands settled by the Hon ble Supreme Court in the case of UOI & Others Vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. 2018 (3) TMI 357 - SUPREME COURT OF INDIA , where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues: Change of cause title due to jurisdiction and address change, Liability of clearing and forwarding agent for service tax on commission and reimbursable expenses.

In the judgment, the Appellate Tribunal CESTAT CHENNAI allowed the miscellaneous applications for change of cause title filed by the Revenue due to the change in jurisdiction of the appellant and address of the respondent. The jurisdiction and address of the respondent were changed from CST, Chennai to The Commissioner of GST & Central Excise, Chennai South Commissionerate.

Regarding the disputed issue in the present appeal, the Tribunal considered whether the appellant, acting as a clearing and forwarding agent for the principal and discharging service tax on the commission received, is liable to include reimbursable expenses in the value of services and pay further service tax on the same. The Tribunal noted that the issue has been settled by the Hon’ble Supreme Court in the case of UOI & Others Vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd., where it was held that no demand can sustain in respect of reimbursable expenses. This decision was followed by the Tribunal in the case of CCE Salem Vs. M/s. Mukesh & Associates, leading to the setting aside of the impugned orders and allowing both appeals with consequential reliefs to the appellants.

The judgment concluded by stating that the miscellaneous applications were also disposed of, with the order being dictated and pronounced in the open court. The decision provided clarity on the liability of clearing and forwarding agents for service tax on commission and reimbursable expenses, aligning with the precedent set by the Supreme Court and previous Tribunal decisions.