𝗖𝗘𝗦𝗧𝗔𝗧 𝗛𝘆𝗱𝗲𝗿𝗮𝗯𝗮𝗱 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗥𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗮𝗯𝗹𝗲 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀 𝗮𝗻𝗱 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 📢 The Tribunal held: "Reimbursable expenses cannot be included in the gross value for service tax purposes as Rule 5 has been declared ultra vires and is no longer applicable."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: R & A Associates 𝗜𝘀𝘀𝘂𝗲: Whether reimbursable expenses must be included in the gross value for service tax purposes?

𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: The appellant, providing Company Secretary services, was accused of not including certain reimbursable expenses (like conveyance, courier, and travel) in their ST-3 returns. The department issued a show-cause notice demanding tax on these expenses.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Tribunal ruled that reimbursed expenses incurred on an actual basis and invoiced via debit notes cannot be included in the gross value for service tax purposes. Rule 5, which proposed their inclusion, was declared ultra vires. The appeal was allowed, and the demand was set aside.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: R & A Associates vs. Commissioner of Central Tax, Secunderabad - GST 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 26849 of 2013 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 01 December 2023 📜 This ruling confirms that reimbursable expenses cannot be included in service tax calculations under the now-invalid Rule 5.