Service tax valuation dispute: separately recovered statutory fees treated as reimbursable amounts, supporting waiver of pre-deposit.

Separately recovered statutory fees and application fees were treated as reimbursable amounts in a service tax dispute, where invoices showed separate recovery and evidence indicated payment on behalf of clients. Although the Revenue relied on Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006 to include the gross amount in taxable value, the material on record established a prima facie case that the disputed sums were not part of the taxable service consideration. On that basis, waiver of pre-deposit and stay of recovery were granted pending appeal.

---

---

Issues: Whether the applicant had made out a case for waiver of pre-deposit and stay of recovery in a service tax dispute concerning inclusion of separately recovered statutory fees and application fees in the taxable value.

Analysis: The applicants claimed that the disputed amounts represented statutory fees and application fees paid on behalf of clients and separately recovered in the invoices. The Revenue invoked Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006 to contend that service tax was payable on the gross amount received. On the material placed, including invoices showing separate recovery and evidence of payment on behalf of clients, the applicants established a prima facie case that the disputed amounts were reimbursable in nature.

Conclusion: The applicants were entitled to waiver of pre-deposit and stay of recovery during the pendency of the appeal.

---