TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal excludes E.S.I./P.F./W.C.P. from taxable service value under Manpower Recruitment Agency Service</h1> <h3>M/s Deep Enterprises Versus Commissioner, Service Tax, Ghaziabad</h3> M/s Deep Enterprises Versus Commissioner, Service Tax, Ghaziabad - TMI Issues Involved:Whether the appellant, a service provider under 'Manpower Recruitment and Supply Agency Service,' is required to pay service tax on reimbursement received for E.S.I./P.F./W.C.P.Analysis:1. The Revenue initiated proceedings against the appellant, demanding service tax for the period 2009-10 to 2012-13, arguing that reimbursable expenses should be included in the total value of services as per Section 67 of the Finance Act, 1994 and Rule 5 of the Service Tax (Determination of Value) Rules, 2006.2. The appellant contended that Rule 5 of the Service Tax Rules had been declared ultra vires by the Delhi High Court in a previous case, emphasizing that reimbursable expenses cannot be part of the assessable value of services. The appellant cited several tribunal decisions supporting this stance.3. Despite the appellant's reliance on the Delhi High Court decision, the Commissioner (Appeals) did not consider it and instead relied on a different tribunal decision, holding that E.P.F., E.S.I.C., etc., are part of taxable services. The limitation aspect of the demand was also not discussed by the Appellate Authority.4. The Tribunal noted the Delhi High Court's decision that Rule 5(1) of the Rules is ultra vires as it seeks to include additional costs incurred by the service provider in the valuation of taxable services. Several tribunal decisions have followed this ruling, establishing that reimbursable expenses should not be part of the gross value of services.5. Given the settled principle that reimbursable expenses should not be included in the assessable value of services, the Tribunal found no justification for including E.S.I./P.F./W.C.P. amounts in the assessable value, as these expenses are reimbursable.6. Consequently, the Tribunal set aside the impugned order and allowed the appeal on merit, without delving into the limitation plea raised by the appellant.This detailed analysis of the judgment highlights the key legal arguments, precedents, and conclusions reached by the Tribunal regarding the issue of service tax on reimbursable expenses in the context of 'Manpower Recruitment and Supply Agency Service.'
TaxTMI 