Purposive interpretation of residential house exemption: unregistered purchase agreement alone does not defeat relief, but investment must be verified...
The appellant, a customs house agent (CHA), collected reimbursement charges from clients for services availed from various service providers. The department demanded service tax on these reimbursed charges, contending they were part of business auxiliary services provided by the appellant. However, the Tribunal held that the appellant merely recovered actual expenses incurred on behalf of clients, with a small commission added. The nature of services remained unchanged, rendered by the service providers to the clients. The appellant acted as a pure agent, and the commission did not alter the character of services. Consequently, the Tribunal set aside the impugned order, ruling that service tax demand on reimbursed charges was legally unsustainable.
The appellant, a customs house agent (CHA), collected reimbursement charges from clients for services availed from various service providers. The department demanded service tax on these reimbursed charges, contending they were part of business auxiliary services provided by the appellant. However, the Tribunal held that the appellant merely recovered actual expenses incurred on behalf of clients, with a small commission added. The nature of services remained unchanged, rendered by the service providers to the clients. The appellant acted as a pure agent, and the commission did not alter the character of services. Consequently, the Tribunal set aside the impugned order, ruling that service tax demand on reimbursed charges was legally unsustainable.
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