Non-monetary consideration: free accommodation and reimbursements held not includible in assessable value, tax demand set aside.

The note examines whether free residential accommodation and related reimbursements furnished by a service recipient qualify as non-monetary consideration and are includible in assessable value under the service tax valuation provision; it records that binding higher-court and coordinate-bench authorities resolve the question against treating such supplies as taxable consideration. Consequently, on the stated facts and relying on settled precedent, claims for service tax, interest and penalty based solely on free accommodation and reimbursements do not survive and the demands are set aside in favour of the service provider.

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Issues: Whether service tax is leviable on free residential accommodation and related reimbursements received from the service recipient (M/s Salar Jung Museum) as consideration in non-monetary form under Section 67(1)(ii) of the Finance Act, 1994 for the period 01.04.2009 to 30.06.2012.

Analysis: The Tribunal examined whether the supply of residential accommodation and other reimbursements by the service recipient to the service provider constituted non-monetary consideration includable in the assessable value under Section 67(1)(ii) of the Finance Act, 1994. The Bench noted binding Supreme Court authority and co-ordinate bench decisions on the issue and concluded that the question was no longer res-integra. On the merits, the Tribunal found that the claims for service tax on free residential accommodation and related reimbursements did not stand in view of the settled law relied upon by the appellant and earlier decisions of the Tribunal on identical facts.

Conclusion: The demand of service tax, interest and penalty insofar as based on free residential accommodation and related reimbursements is set aside; the appeal is allowed in favour of the assessee.

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