2019 (2) TMI 94 - HC - Service Tax

Valuation - inclusion of expenses and salaries paid to the Security Guards and the statutory payments like contributions to ESI and EPF in gross value - Vires of Section 67 in Chapter V of the Finance Act, 1994 (Act 32 of 1994) and the amendments made in the Rules and Notifications therein - Held that:- In Union of India v. M/s Intercontinental Consultants & Technocrats Pvt.Ltd., [2018 (3) TMI 357 - SUPREME COURT OF INDIA], Hon'ble Supreme Court while considering the scope of Section 67 of the Act and the Rules made thereunder, and in particular the constitutional validity of Rule 5, held that the valuation of taxable service shall be 'gross amount' chargeable by the services provided 'for such services', to the extent it includes reimbursement of expenses in the value of taxable service for the purpose of charging service tax - In the said decision, the consideration was mainly concerned with the reimbursement of expenses incurred, such as air travel, hotel stay, etc; whereas, in the case in hand, we are concerned with the amounts, which is inclusive of the ESI, EPF and such other statutory payments to be paid by the employer for the persons employed. Therefore, the security agencies are totally on a different footing and the above-cited decision is not applicable to the case in hand.

There are no merits or reasons to interfere with these findings of the learned Single Judge so as to hold that the provisions under Section 67 is ultra vires the Constitution - appeal dismissed.