Sum paid as a pure agent of service recipient is not includible in value of services
Last updated: 18 February 2015
Court :
igh Court, Chhattisgarh
Brief :
The Hon’ble High Court of Chhattisgarh after discussing provisions under Section 67 of the Finance Act, 1994 (“the Finance Act”) read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006 (“the Valuation Rules”), upheld the Order of the Hon’ble Tribunal holding that Primary claim/ Retailer scheme is the amount which the service provider (i.e. the Assessee) had given to the retailers on behalf of SBL for achieving certain quota of sales for which they were reimbursed by SBL as a pure agent. Accordingly, the said amount would be dealt in view of Rule 5(2) of the Valuation Rules which provides exclusion of expenditure or cost incurred by the service provider as the pure agent.
Citation :
Union of India Vs. Raj Wines [(2015) 53 taxmann.com 445 (Chhattisgarh)]
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Bimal Jain
Published in Service Tax
Views : 2996
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