Service tax valuation excludes reimbursable labour wages before 14 May 2015, following the Supreme Court ruling.

Reimbursable wages paid to labourers supplied under manpower recruitment or supply agency services were held not includible in the assessable value for service tax for the period before 14 May 2015. The Tribunal applied the Supreme Court ruling that reimbursable expenses could be added to the taxable base only from that date, and therefore Rule 5 of the Service Tax Valuation Rules, 2006 could not justify inclusion for the earlier period. The impugned order was set aside as unsustainable against the assessee.

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Issues: Whether reimbursable expenses in the form of wages paid to labourers supplied by the appellant were includible in the assessable value for service tax for the period prior to 14 May 2015.

Analysis: The dispute concerned valuation of services rendered under manpower recruitment or supply agency services, where the appellant had excluded labour wages reimbursed by the service recipient from the taxable base. The impugned order had relied on Rule 5 of the Service Tax Valuation Rules, 2006 to include such reimbursements. The Tribunal applied the Supreme Court ruling that reimbursable expenses could be brought into the assessable value only from 14 May 2015, and that for the earlier period they were not includible.

Conclusion: The reimbursable wages were not includible in the assessable value for the period in dispute, and the impugned order was unsustainable in favour of the assessee.

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