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2017 (6) TMI 54 - AT - Service TaxValuation - includibility - whether amounts recovered by the assessee’s towards royalty, advertising plan, cost of manual supplied and certificates issued under the franchise agreements both on account of “Bachpan” and “Heights” were part of the gross value under Section 67 for the purpose of payment of Service Tax? Whether the advertisement reimbursement charges should be included in the gross amount for charging service tax? - Held that: - It is settled provision of law that any expenditure incurred by the service provider in the course of providing taxable services and reimbursed cannot be considered as consideration for taxable services - there is no justification for including reimbursable expenditure in the taxable service tax. Amounts received by the assessee towards cost of manuals and certificates supplied - levy of tax - Held that: - the invoices raised for supply of manual and certificates indicate that the assessee has paid VAT for such sales covering the value of manual and certificates supplied. It is settled law that no service tax is leviable in cases where goods have been sold on payment of VAT/ Sales tax. Consequently, we conclude that no Service Tax is leviable on the amounts received for manuals and certificates. Levy of tax - Royalty Charges - Held that: - such amounts have been charged for transfer of technical know-how on running of Play School by franchisees - service not taxable. There is no justification for levy of service tax on the amounts received by the assessee towards royalty, cost of manuals and certificates as well as advertisement reimbursement charges - the demand of service tax for the entire period from 01.07.2003 till 30.06.2012 is required to be set aside - appeal allowed - decided in favor of appellant.
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