10 June 2024


Customs, Excise and Service Tax Appellate Tribunal

Akshoy Kumar Ghosh And Sons vs. Commissioner of Central Excise & Service Tax



Service Tax

Reimbursable expenses are not includible in the taxable value of services

The Appellant is in appeal against the impugned order wherein the demand of service tax has been raised on account of non-inclusion on reimbursable expenses incurred by the Appellant in taxable services.

The Appellant has claim that they are the pure agents. In support of their claim, the Appellant has filed various agreement with their Principal, which shows that the appellant is the pure agent and all the expenses of Principal are for taking and delivery of the goods, for making payment for transportation, freight of clearing and forwarding services for the purposes of agency. All the charges paid are to be reimbursed to the appellant on actual basis as the appellant is a pure agent.

The Appellant is only pure agent and all the expenses for transportation, loading and un-loading etc. paid by the Appellant were reimbursed from the Principal on actual basis. The Appellant is not required to include the reimbursable expenses in their taxable services.

Moreover, the present issue whether the reimbursable expenses are includable in the taxable value or not, has been examined by this Tribunal in the case of Ganga Carrier Private Limited.As this Tribunal has already held that, the reimbursable expenses are not includible in the taxable value of services, therefore, present Tribunal hold that the reimbursable expenses in this case, are also not includable in the taxable value of service. Therefore, the Appellant has correctly paid the service tax during the impugned period. Consequently, no demand of differential service tax is sustainable against the appellant. There is no merit in the impugned order and the same is set aside. Appeal allowed.

Tags : Demand Confirmation Legality

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