Reimbursable Expenses and Logistics Income Not Subject to Service Tax Under Sections 66 and 67

CESTAT ruled that reimbursable expenses received by service providers alongside service fees are not subject to service tax, following SC's precedent in Intercontinental Consultants case. The tribunal invalidated service tax demands on port congestion, storage, seal amendment, and detention charges, deeming Rule 5(1) of Service Tax Valuation Rules 2006 ultra vires to Sections 66 and 67. Additionally, citing Tiger Logistics precedent, CESTAT held that logistics income and markup on ocean freight are not taxable services. The appellate authority's findings imposing service tax on these components were set aside as legally unsustainable. The appeal succeeded with both demands being overturned as they exceeded statutory scope. .....

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