BIS marking fee forms part of certification service value and is taxable under the Finance Act.

Bureau of Indian Standards marking fee charged for grant of licence to use the standard mark on cement bags is part of the consideration for technical inspection and certification service. The certification process involves testing and confirming conformity with prescribed standards, so the licence and mark are inseparable from that service. Under the Finance Act, 1994, the taxable value is the gross amount charged for the service, and the marking fee therefore forms part of the taxable value. The refund claim was rejected accordingly.

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Issues: Whether the Bureau of Indian Standards marking fee charged for grant of licence to use the standard mark on cement bags is includible in the taxable value of services falling under technical inspection and certification.

Analysis: Section 65(108) of the Finance Act, 1994 covers inspection or examination of goods or materials and certification that they satisfy specified standards. Regulation 3 of the Bureau of Indian Standards (Certification) Regulations, 1988 shows that the licence and standard mark are granted after testing and certification of conformity to prescribed norms. The marking fee is part of the consideration for the certification service and, under Section 67 of the Finance Act, 1994, the taxable value is the gross amount charged for the service.

Conclusion: The marking fee is includible in the value of taxable service and the claim for refund was rightly rejected.

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