75th Founding Day Lecture Meeting on “India@2030” Know More

November 2015

2015 (39) STR 995 (Tri.- Mumbai) Tetra Pack India Pvt. Ltd. vs. CCE, Pune-III

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 1 mins
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Reimbursable expenses not includable while determining gross value of services.

Facts:
Department sought service tax on recovery made for reimbursable expenditure which ought to be incurred while providing output services. Reimbursable expenditure were reckoned as consideration for services rendered as per Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 (Valuation Rules).

Held:
Rule 5(1) of Valuation Rules was struck down by the Hon’ble Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. vs. Union of India 2013 (29) STR 9 (Del) on account of rule being ultra vires sections 66 and 67 of the Finance Act,1994 based on which the order was set-aside.

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