Pure-agent treatment excludes only recipient liabilities; undisclosed stockbroker transaction charges remain taxable and support extended limitation.

Turnover and transaction charges collected by a stockbroker form part of the taxable value for service tax where they are the provider's expense rather than amounts paid solely as a pure agent for the service recipient. The charges became taxable from 16 May 2008, and the stated analysis concludes that the stockbroker did not satisfy the pure-agent condition. Extended limitation may apply where a provider consciously fails to file returns and disclose liability despite a clarification that gross amounts received are taxable and a denial of reimbursable treatment. The notes state that such non-disclosure constitutes wilful suppression, sustaining the tax liability and extended limitation.

---

---

Issues: (i) Whether turnover/transaction charges received by a stockbroker were includible in taxable value for service-tax purposes; (ii) Whether the extended period of limitation was validly invocable for non-payment of tax on those charges.

Issue (i): Whether turnover/transaction charges received by a stockbroker were includible in taxable value for service-tax purposes.

Analysis: Turnover/transaction charges became taxable from 16.05.2008. Such charges are includible where they represent an expense of the service provider; exclusion is available only where the liability is that of the service recipient and the provider pays it as a pure agent. The appellant was not acting as a pure agent in collecting the charges.

Conclusion: Turnover/transaction charges were includible in taxable value and service tax thereon was payable, against the assessee.

Issue (ii): Whether the extended period of limitation was validly invocable for non-payment of tax on those charges.

Analysis: The clarification issued on 19.04.2006 specified that the gross amount received by a stockbroker was taxable. The appellant had also sought clarification concerning treatment of transaction charges as reimbursable amounts, which was denied. Failure to file service-tax returns and deliberate non-disclosure of liability on these charges established wilful suppression and negatived the asserted bona fide belief.

Conclusion: Invocation of the extended period of limitation was justified, against the assessee.

Final Conclusion: The service-tax liability on the turnover/transaction charges and the consequential invocation of the extended limitation period remain sustainable.

Ratio Decidendi: Amounts collected by a service provider form part of taxable value unless paid solely as a pure agent for the service recipient; conscious non-disclosure despite applicable clarification justifies extended limitation for suppression.

---