Scholarship fee concessions under a bona fide promotion scheme are not non-monetary consideration for service tax valuation.

A pre-declared scholarship-linked fee concession in a commercial coaching scheme, publicly notified and applied on objective criteria such as merit, sibling benefit, or alumni status, was held not to be non-monetary consideration for service tax valuation. Since tax was discharged on the amount actually collected, the declared concession could not be disallowed as a bona fide trade practice, and the taxable value could not be artificially enhanced by invoking the valuation rules. The impugned orders were set aside and the appeals were allowed, as the concession was held outside the taxable value under section 67.

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Issues: Whether the concessional fee extended under a pre-declared scholarship scheme in commercial coaching constituted non-monetary consideration warranting addition to the taxable value, and whether valuation rules could be invoked to enhance the service tax liability beyond the amount actually received.

Analysis: The scholarship scheme was publicly notified and operated on objective criteria such as merit, sibling benefit, or alumni status. It functioned as a business promotion measure and the appellants accepted service tax on the amount actually collected. On the facts, the concession could not be treated as non-monetary consideration. In the absence of any basis to disallow the declared fee concession as a bona fide trade practice, the gross value for section 67 purposes could not be artificially enhanced by invoking the valuation rules.

Conclusion: The issue was decided in favour of the appellants and against the Revenue.

Final Conclusion: The impugned orders were set aside and all appeals were allowed because the scholarship-linked fee concession was held not to form part of the taxable value.

Ratio Decidendi: A pre-declared, publicly notified fee concession granted under a bona fide business promotion scheme does not constitute non-monetary consideration for service tax valuation where tax is discharged on the amount actually received.

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