2023 (8) TMI 247 - AT - Service Tax

Recovery of the service tax - collection of P T charges from customers but non-discharge of service tax on the same - inclusion of such expenses in the assessable value or not - Banking and Other Financial Services - HELD THAT - The issue of includability of reimbursable expenses namely P T charges is no more res-integra as the Hon ble Apex Court has examined the same issue in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT stating that the reimbursable expenses could be included in the gross taxable value post 2015. There are no merit in the impugned orders. Consequently, the same are set aside and the appeals are allowed

Summary

Issues involved: Determination of includability of reimbursable expenses under Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 for the period from September 2004 to September 2005.

Summary:

Issue 1: Includability of reimbursable expenses under Rule 5(1) of Service Tax Rules, 2006

The appellant provided services under the category of 'Banking and Other Financial Services' during the relevant period but did not discharge service tax on the P & T charges collected from customers. Show cause notices were issued for recovery of unpaid service tax on these charges. The learned Commissioner (Appeals) upheld the demands, citing Notification No. 12/2006-ST and Rule 5(1) of Service Tax (Determination of Value) Rules, 2006. The appellant argued that the inclusion of reimbursable expenses is settled law post the Supreme Court decision in UOI vs. M/s Inter-continental Consultant & Technocrats Pvt Ltd. The Tribunal examined the issue and held that the reimbursable expenses could be included in the gross taxable value post 2015, as per the interpretation of Section 67 of the Finance Act, 1994. The Tribunal found no merit in the impugned orders and allowed the appeals, following the precedent set by the Supreme Court and other benches of the Tribunal.