Free-supplied material and service tax abatement: tribunal commentary supports exclusion from taxable value and unconditional stay.

The commentary addresses whether free-supplied material received from clients must be included in the gross amount for computing abatement under the relevant service tax notification. It notes that Tribunal and High Court authorities had treated such material as outside the taxable value for abatement purposes under Notification No. 15/2004-ST. On that basis, the appellant was regarded as having a strong prima facie case on the valuation issue, and unconditional stay was considered justified.

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Issues: Whether the appellant was entitled to unconditional stay in view of a prima facie case on the inclusion of the value of free supplied material in the gross amount for claiming abatement under the relevant service tax notification.

Analysis: The dispute centered on the Revenue's objection that the appellant had not included the value of material supplied free of cost by clients while claiming 67% abatement under Notification No. 15/2004-ST. Reliance was placed on Tribunal and High Court authorities holding that, for the purposes of the notification, the value of such free supplied material is not to be included in the taxable value for abatement computation. On that basis, the appellant's claim was treated as supported by a good prima facie case.

Conclusion: The appellant was held entitled to unconditional stay.

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