2025-VIL-1867-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 67 of Finance Act, 1994 – Reimbursable expenses – Tax liability – Appellant is engaged in providing Customs House Agent (CHA) service – During course of audit, department noticed that Appellant had collected various charges from their clients in course of rendering CHA service, but did not pay service tax on same by claiming that said charges being reimbursable expenditure are not leviable to tax – Department issued show cause notice to Appellant by proposing demand of Service Tax on aforesaid charges – Adjudicating Authority dropped proceedings initiated in show cause notice – Commissioner (Appeals) allowed appeal preferred by Revenue and set aside order passed by Adjudicating Authority – Whether Appellant is liable to pay Service Tax on reimbursable expenses – HELD – Appellant is in business of providing service as a CHA and has discharged service tax on consideration received for providing CHA services. While computing value of taxable income, Appellant had excluded reimbursable charges. Since expenses were reimbursed by client on actual basis, Appellant did not discharge service tax on reimbursable expenses, as it is not a consideration for any services rendered. Section 67 of the Act dealing with valuation of taxable services, does not include reimbursable expenses. Service charges received as consideration for services provided or to be provided would form part of taxable value for purposes of service tax and reimbursements are not liable to tax. Impugned order in appeal cannot sustain and hence, it is set aside – Appeals allowed
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