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2022 (7) TMI 457 - AT - Service TaxValuation - non-inclusion of certain expenses incurred by the service recipient - Insurance Auxiliary Services - Illegal recovery of service tax from the insurance agent - non-inclusion of certain expenses such as business promotion expenses, pre recruitment training expenses, refreshable training expenses & sells and other training expenses. Whether the appellants are required to pay service tax on the amount representing the service tax paid by them and deducted by them from the commission payable to their life insurance agents? - HELD THAT:- A plain reading of the provisions, of Section 73A (2) and (3), which have been invoked by the Revenue, it is clear that any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. A correct reading of the provisions indicates that the amount representing service Tax would necessarily mean the service Tax not paid. There is no provision to say that service Tax which has already paid should not be recovered from anyone. Such an understanding is contrary to the principles of indirect taxation - If the person liable to pay Tax, having paid the Tax liable, has an understanding/agreement with his Customers to recover such Tax from them, the provisions of the Section cannot be invoked. Whether the appellants are liable to pay service tax on various expenses incurred in training, business promotion expenses, pre-recruitment etc.? - HELD THAT:- A perusal of provisions in section 67 of FA, indicates that the “consideration” for the purposes of levy of service tax include any amount that is payable for the taxable services provided or to be provided and any reimbursable expenditure are cost incurred by this service provider and charged - In the instant case it is not the case of the Revenue that the expenses in question were incurred by the service provider i.e. the insurance agents and charged to the appellants. It is the appellants that have incurred the expenditure. though, it can be argue, that the expenses on pre- recruitment training/ re-furbisher training should have been born by the agents themselves in order to obtain a license from the Regulatory Authority, the explanation to Section 67 as above does not provide for inclusion of any expenditure that could have been borne by the service providers - the expenses incurred by the appellants are not goes required to be included in terms of the explanation under Section 67. Therefore, the demands confirmed on the various expenses incurred by the appellants are not sustainable. Accordingly, they need to be set aside. Appeal allowed - decided in favor of appellant.
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