Cce & S.Tax - Dibrugarh vs M/S. Oil India Limited, on 22 October, 2024
Briefly, the Appellant have submitted that the reimbursements
are not included in the value of the service. It has been urged
that in terms of Section 67 of the F.A., the taxable value for the
purpose of charging service tax is the actual amount of
consideration charged by the service provider from the service
receiver rendering of the service. They have relied upon the
Trade Notice No. 7/98-ST dated 13.10.1998 issued by the
Mumbai Commissionerate-I stating that reimbursable/out- of-
pocket expenses charged to the client on actual basis are not
subject to service tax; that similarly, in terms of Trade Notice
No. 5/97-ST dated 12.6.1997 issued by the Mumbai
Commissionerate-1 in the context of Customs House Agents
services, it has been clarified that the CHA will be required to
pay service tax only on the agency commission received by
them and not on the other reimbursable expenses incurred on
behalf of the client. They relied upon the decision of the Hon'ble
Tribunal in the case of S. Jayashree vs. CCE, Mangalore
[2007(6)S.T.R.389 (Tri Bang.)] to the effect that expenses
which are being reimbursed on actual basis by the principal are
not liable to be included in their gross receipts for calculating
service tax liability. They also relied upon the following cases: