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February 2014

2014 (33) STR 137 (Mad) Commissioner of S.T., Chennai vs. Sangamitra Agency Services

By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
Reading Time 1 mins
76. 2014 (33) STR 137 (Mad) Commissioner of S.T., Chennai vs. Sangamitra Agency Services

Reimbursable expenses not to be included in the taxable value related to Clearing & Forwarding agents service.

Facts:

The revenue was in appeal against the order of the Hon. Tribunal holding that reimbursable expenses received by the assessee was not includible in the taxable value and that only the amounts received as remuneration / commission from their principals was assessable to tax and referred to the decision of Sri Sastha Agencies Pvt. Ltd. vs. Asst. Commissioner 2007 (6) STR 185 (Tri-Bang).

Held:

Upholding the Tribunal’s view, the Hon. High Court stated that in the absence of any material to show the understanding between the principal and the client that the commission payable was all inclusive, it was difficult to hold that the gross amount of remuneration/commission would include expenditure incurred by the assessee and that all incidental expenses would also form part of the assessable value.

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