TaxTMI 
TaxTMI 
2023 (12) TMI 436
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....ing amount towards expenses like conveyance, courier charges, miscellaneous expenses, stationery charges and travelling expenses etc., which they have not shown in their ST- 3 returns. Thereafter, invoking the provisions of the Rule 5 of the Service Tax (Determination of Value) Rules, 2006 read with Section 67 of Chapter 5 of Finance Act 1994, as also the Rule 5(2) of Service Tax (Determination of Value) Rules, 2006 stating that such expenses were not deductable from the gross receipt for arriving at the assessable value, a Show Cause Notice demanding service tax of Rs. 2,69,613/- along with interest as also for imposition of penalty under Section 78, was issued to the Appellant. 3. The Adjudicating Authority, after going through the Rule ....
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....rvices provided to their clients. Learned CA has relied on many case laws wherein the levy of service tax on the reimbursed amount has not been held correct. He has also relied on the following case laws: i) VITP Private Limited (Formerly known as Vanenburg IT Park Pvt Ltd.,) Vs Commissioner of Central Tax, Hyderabad-IV [2022 (7) TMI 1030 - CESTAT Hyderabad] ii) Kfin Technologies Pvt Ltd., Vs Commissioner of Central Tax, Hyderabad [2021 (10) TMI 588 - CESTAT, Hyderabad] iii) Karvy Consultants Ltd., Vs CCE, Hyderabad-II [2019 (24) GSTL 240 (Tri-Hyd)] They have also relied on following case laws in support of that "reimbursement" has been specifically included in the definition of consideration with effect from 14.05.2015 and not befor....
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....he parties. 8. On going through the rival contentions, the core issue for determination is whether the amount received by the Appellants from their clients in respect of certain expenses on actual basis, would be a reimbursable amount or otherwise and if it is a reimbursable, whether the same needs to be included in the gross value charged for the purpose of levy of service tax or otherwise. 9. Since the Show Cause Notice has relied on Rule 5, it is important to peruse the Rule 5 of Service Tax (Determination of Value) Rules, 2006. Rule 5 provides for inclusion in or exclusion from the value of certain expenditure or costs' and the provision is reproduced below for better understanding; "5. Inclusion in or exclusion from value of certai....
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....ce Act 1994 and Rules made there under, the Hon'ble Court declared Rule 5 to be ultra vires of the provision of Section 66 & 67 of Finance Act 1994. The Hon'ble Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt Ltd., [2018 (10) GSTL 401 (SC)] examined the correctness of the judgment of the Delhi High Court upheld the decision of Hon'ble Delhi High Court. The Hon'ble Supreme Court also took note in para 29, that Legislature amended Finance Act in 2015, with effect from 14.05.2015, amending the definition of "consideration" to include reimbursable expenditure / cost incurred by the service provider and therefore observed that with effect from 14.05.2015, by virtue of provisions of Section 67 itself, such reimbursab....