Service tax valuation excludes employee expense reimbursements; only consideration for the taxable service forms the assessable value.

Reimbursements of salary, bonus, statutory payments and other employee-related expenses recovered from customers were held outside the taxable value of Manpower Recruitment and Supply Agency Service under section 67 of the Finance Act, 1994 because the taxable base is limited to the gross amount charged for the service actually provided. Only the administrative charge represented consideration for the service rendered; reimbursed employee costs were not part of that consideration and were therefore not includible in assessable value. The demand based on adding such reimbursements could not be sustained.

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Issues: Whether reimbursements towards salary, bonus, statutory payments and other employee-related expenses recovered from customers were includible in the taxable value of Manpower Recruitment and Supply Agency Service for the purpose of service tax.

Analysis: The taxable value under section 67 of the Finance Act, 1994 is confined to the gross amount charged for the service actually provided. Applying the principle that only consideration for the taxable service can be brought to charge, reimbursable amounts paid towards employees' salary and allied expenses do not form part of the service element. The administrative charge alone represents the charge for the service rendered, while salary and similar reimbursements are outside the taxable base.

Conclusion: The reimbursable employee-related expenses were not includible in the gross taxable value; only the administrative charges were taxable.

Final Conclusion: The demand confirmed by including reimbursements in the assessable value could not be sustained, and the assessee succeeded on merits.

Ratio Decidendi: For service tax valuation, only the consideration attributable to the taxable service is includible in the gross value, and reimbursements for expenses incurred on behalf of another are excluded unless the statute expressly provides otherwise.

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