Warehousing Charges Excluded from Service Tax: Reimbursed Expenses Not Considered Taxable Service Value

CESTAT ruled that warehousing charges collected by the Custom House Agent (CHA) as reimbursed expenses do not constitute taxable service value. Referencing the Supreme Court's precedent in Intercontinental Consultants, the tribunal affirmed that reimbursable expenses incurred in service provision should not be included in the assessable value. The decision invalidates the tax demand for warehousing charges for 2006-07, finding that Rule 5(1) of Service Tax Valuation Rules, 2006 exceeded statutory powers under Sections 66 and 67. Consequently, the appellant's appeal was allowed, setting aside the original tax assessment order. .....

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