TaxTMI 
TaxTMI 
2024 (1) TMI 677
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....go Pvt Ltd [the Appellant]. 2. The sole issue that arises for consideration in this appeal is whether the appellant, who had paid service tax on the amount received towards agency charges while providing clearing and forwarding agent service, is also required to pay service tax on the reimbursement amount which it had incurred for the service recipient. 3. The Commissioner has recorded a finding based on rule 5(1) of the Service Tax (Determination of Value) Rules 2006 [2006 Rules] that the expenditure incurred by the service provider in the course of providing taxable service shall be treated as a consideration for the taxable service. Though the appellant had placed before the Commissioner, the decision of the Delhi High Court in Interco....
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....me Court. 5. Shri Rajeev Kapoor, learned authorized representative appearing department supported the impugned order. 6. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 7. Section 67 of the Finance Act deals with valuation of taxable services for charging service tax. Sub-section (1) of section 67 provides that where service tax is chargeable on any taxable service with reference to its value, then such value shall, where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider. It is, therefore, clear that on....
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.... by the service provider for such services provided or to be provided by him in a case where consideration for such service is money. The High Court placed emphasis on the words "for such service" and took the view that the charge of service tax under section 66 has to be on the value of taxable service i.e. the value of service rendered by the assessee and the quantification of the value of service can, therefore, never exceed the gross amount charged by the service provider for the service provided by him. On that analogy, the High Court opined that the scope of rule 5 goes beyond the scope of section 67 which was impermissible as rules could be framed only for carrying out the provisions of Chapter V of the Finance Act. In taking this vi....