Taxable value determination for reseller agreement - repatriated ...

Appeal Dismissed: Reimbursable Expenses Must Be Included in Gross Value for Tax Under Reseller Agreements.

July 5, 2024

Case Laws     Service Tax     AT

Taxable value determination for reseller agreement - repatriated amount after deducting profit margin and costs incurred in reselling IT-enabled services not correct value u/s 67. Appellants incurred expenses offset and reimbursed by principal supplying services. Price at import could not be determined, linked to price realized from Indian customer. Gross value charged to customer basis for computing principal's price, cannot exclude reimbursable expenses under reverse charge mechanism provisions treating appellants as service providers. Section 67 applicable. Extended period limitation and penalty - revenue neutrality not available as defense, show cause notices within normal period. Appellate orders on including operating/marketing expenses in gross value and de novo proceedings on extended period invocation and penalty imposition correct. Appeal dismissed.

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