2017 (12) TMI 24

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..... ing Service Tax for the said services. The dispute in the present appeal relates to valuation of said service for service tax purposes. More particularly, the dispute is with reference to certain bill amounts shown as reimbursement charges of Gift Prices, Display Cost, Stall Sample, audio System, Permission for campaigning from State Government, Promotional Materials etc. incurred by the appellant and reimbursed by their clients on cost basis. The Revenue held a view that all the charges incurred by the appellant in connection with providing services shall be considered for tax purposes in terms of Section 67 of the Finance Act, 1994. The claim of the appellant that these were reimbursed on actual basis and are to be excluded from taxable v .....

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..... g the said ratio, impugned order held that the appellant is liable to pay Service Tax on the gross amount. 4. We have heard both sides and examined the records. 5. We note that the dispute in the present appeal relates to valuation of service rendered by the appellant. The Revenue held a view that reimbursable expenditure as claimed by the appellant cannot be excluded, as there is no legal sanction for such exclusion. The concept of pure agent was introduced in terms of Rule 5 of Service Tax Valuation Rules, 2006 and the same is not applicable for the period prior to the Notification of the said Rules. We find that valuation of taxable service in terms of Section 67 can be with reference to service, if there were purchase and sale of good .....

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..... xclusion of other reimbursable expenditure as evidenced by documents are not to be treated for tax purposes. View of the Revenue that the introduction of Rule will change this valuation concept is not accepted. Section 67 can bring the valuation of taxable service only with reference to service. In the evidence available in the present appeal that these were reimbursements, which are on actual basis in terms of agreement with the clients and are known to the parties, the same are not to be brought in for taxable purpose under Section 67. 7. Accordingly, we find that the analysis made in the original order is correct and proper and the impugned order is liable to be set aside. Accordingly, we set aside the impugned order and allow the appea .....

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