Free-supplied items excluded from assessable value for service tax abatement claims under construction service notifications.

The assessable value for claiming abatement under Notification No. 15/2004-S.T. and Notification No. 1/2006-S.T. for commercial or industrial construction service and construction of residential complex service did not include the value of free supplies provided by the service recipient. The analysis follows the larger Bench ruling in Bhayana Builders (P) Ltd. and notes that subsequent decisions applied the same view. On that basis, free-supplied items were not to be added to the assessable value for the abatements claimed under those notifications, and the appeal succeeded.

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Issues: Whether the value of free-supplied items provided by the service recipient was required to be included in the assessable value for availing abatement under Notification No. 15/2004-S.T. or Notification No. 1/2006-S.T. in respect of commercial or industrial construction service and construction of residential complex service.

Analysis: The issue was treated as already settled by the larger Bench decision in Bhayana Builders (P) Ltd., and the Tribunal noted that the same view had been followed in subsequent decisions. On that basis, the inclusion of the value of free supplies in the assessable value was not accepted for the purpose of the abatements claimed under the notifications.

Conclusion: The value of free-supplied items was not required to be added to the assessable value for the purpose of the abatement notifications, and the appeal succeeded.

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