Service tax valuation for photography service allows deduction of consumed materials without separate invoice disclosure

Under the service tax valuation framework for photography service, the value of materials consumed in rendering the service was deductible where the assessee maintained proper input records. The benefit under Notification No. 12/2003-S.T. and the Board's clarification did not depend on separately showing those materials in customer bills or invoices. Since the relevant records were kept and no disclosure requirement appeared in the notification or clarification, denial of the deduction solely for non-separate invoicing was unsustainable. The assessee was therefore entitled to exclude the value of such materials from service tax computation.

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Issues: Whether, in computing service tax liability on photography service, the value of material consumed while rendering the service was deductible when the assessee had maintained records of such inputs but had not shown them separately in the customer bills or invoices.

Analysis: The assessment was tested against the relevant service tax valuation framework and the exemption/clarification contained in Notification No. 12/2003-S.T. and the Board's letter. The decisive point was whether the benefit depended on disclosure of the materials in the invoice. The record showed that the assessee maintained the requisite input records, and neither the notification nor the clarification required the materials used in photography to be separately mentioned in the bills or invoices issued to customers. The denial of deduction solely on that ground was therefore inconsistent with the governing notification and clarification.

Conclusion: The assessee was entitled to deduction of the value of the materials used in providing photography service, and the denial of the benefit was not sustainable in law.

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