2026-VIL-240-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Inclusion of expenses incurred by the respondent towards services provided to the foreign service provider's specialists in the taxable value for Service Tax under RCM - Respondent entered into a contract with a foreign service provider - As per the contract, the respondent was required to bear the expenses towards air travel, accommodation etc. of the foreign service provider's specialists visiting India - Whether the expenses incurred by the respondent towards the services/facilities provided to the foreign service provider's specialists are includable in the taxable value for the purpose of payment of Service Tax under RCM – HELD - In Toyota Kirloskar Auto Parts Pvt. Ltd. and Bhayana Builders Pvt. Ltd. cases, it was held that the expenses incurred by the service recipient in enabling the foreign service providers to perform the services in India cannot be considered as part of the value of taxable service under Section 67 of the Finance Act, 1994 - The value on which Service Tax is payable has to satisfy two key ingredients i.e. the amount should be "charged" by the service provider to the service recipient, and the amount charged should be a consideration "for such service provided". The expenses incurred by the respondent towards the foreign specialists do not meet these requirements as they were not charged by the foreign service provider and did not form part of the consideration for the consulting engineering service - the issue is no longer res-integra and therefore, no need to interfere in the impugned order – The Revenue appeal is dismissed
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