I. Rule 6 of the Service Tax Rules, 1994 read with sections 65(25) and 67, of the Finance Act, 1994 - Valuation of taxable services - Inclusion of Reimbursements - Period from 16-10-1998 to 18-4-2006 - As per rule 6(8), value of Clearing and Forwarding Agent services would gross amount of remuneration or commission (by whatever name called) paid to such agent by client - Phrase 'by whatever name called' must necessarily have some link or reference or nature to receipt of remuneration or commission and, therefore, gross amount referred to in rule 6(8) would apply to receipts of such sum, which would bear character of remuneration or commission - If a receipt is for reimbursing expenditure incurred for purpose of providing services, mere act of reimbursement cannot be regarded as having character of remuneration or commission [Paras 7 to 9] [In favour of assessee]
II. Rule 6 of the Service Tax Rules, 1994 read with sections 65(25) and 67, of the Finance Act, 1994 - Valuation of taxable services - Inclusion of Reimbursements - Period from 16-10-1998 to 18-4-2006 - Assessee, a clearing and forwarding agent, reimbursements towards freight, labour, electricity, telephone etc. - Department included said charges in taxable value - Assessee argued that as per rule 6(8) of Service Tax Rules, 1994, only gross amount of remuneration or commission constituted value and, therefore, reimbursements were not includible - HELD : In absence of any material to show understanding between principal and client that commission was all inclusive, it is difficult to hold that gross amount of remuneration/commission would nevertheless include expenditure/ incidental charges for running of business - Since revenue's case did not rest on a contention that expenditure incurred has character to fall under expression 'remuneration or commission', revenue's contention was liable to be rejected [Paras 7 to 9] [In favour of assessee]
Words and Phrases : 'By whatever name called' as used generally
Refer:[2014] 43 taxmann.com 363 (Madras)
HIGH COURT OF MADRAS
Commissioner of Service Tax, Chennai
v.
Sangamitra Services Agency
II. Rule 6 of the Service Tax Rules, 1994 read with sections 65(25) and 67, of the Finance Act, 1994 - Valuation of taxable services - Inclusion of Reimbursements - Period from 16-10-1998 to 18-4-2006 - Assessee, a clearing and forwarding agent, reimbursements towards freight, labour, electricity, telephone etc. - Department included said charges in taxable value - Assessee argued that as per rule 6(8) of Service Tax Rules, 1994, only gross amount of remuneration or commission constituted value and, therefore, reimbursements were not includible - HELD : In absence of any material to show understanding between principal and client that commission was all inclusive, it is difficult to hold that gross amount of remuneration/commission would nevertheless include expenditure/ incidental charges for running of business - Since revenue's case did not rest on a contention that expenditure incurred has character to fall under expression 'remuneration or commission', revenue's contention was liable to be rejected [Paras 7 to 9] [In favour of assessee]
Words and Phrases : 'By whatever name called' as used generally
Refer:[2014] 43 taxmann.com 363 (Madras)
HIGH COURT OF MADRAS
Commissioner of Service Tax, Chennai
v.
Sangamitra Services Agency
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