Pre-notified scholarship fee concession not treated as non-monetary consideration for service tax valuation

A pre-notified scholarship or fee concession under a bona fide business promotion scheme was not treated as non-monetary consideration for service tax valuation. The amount actually received from students was regarded as the gross amount charged, and there was no basis to add the waived portion back to the taxable value under the valuation rules. Service tax was therefore payable only on the amount actually charged and received.

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Issues: Whether scholarship or fee concession granted under a pre-declared prospectus can be treated as non-monetary consideration so as to require addition of the concessional portion to the taxable value for service tax purposes.

Analysis: The concession was part of a publicly notified scholarship scheme and formed part of the service provider's business promotion policy. The amount actually received from the students represented the gross amount charged, and there was no material to treat the waived portion of fee as additional non-monetary consideration. In these circumstances, the valuation provisions did not justify invoking the service tax valuation rules to add the concession back to the taxable value.

Conclusion: The scholarship or fee concession could not be added as non-monetary consideration, and service tax was payable only on the amount actually charged and received.

Ratio Decidendi: A pre-notified, bona fide fee concession under a scholarship scheme does not constitute non-monetary consideration for valuation purposes under service tax law.

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