Order Date: 30 May 2022

Facts:

• The appellant “M/s. RMA & Associates” was engaged in providing “chartered accountant services”. The dispute is regarding the non-payment of service tax on the amount representing reimbursement of expenses like conveyance, travelling and mobile expenses.

• The Show Cause Notice was issued on 02 July 2008. It stated that the appellant had not paid service tax on the expenditure got reimbursed by them in the course of performance of their professional services and it appears that value of service is to be added in the gross value of services rendered by them in terms of section 67 of Finance Act, 1994.

• Therefore, the submissions made by the appellant before the Commissioner (Appeals) did not find favour of the Commissioner (Appeals) and the appeal was ultimately dismissed.

Issues:

• Whether, the appellant is liable to pay service tax on the amount representing reimbursement of expenses like conveyance, travelling and mobile expenses or not?

Order:

• The Cestat observed that the issue, in respect of reimbursable expenses has been considered and decided by the Supreme Court in Union of India vs. Intercontinental Consultant and technocrats - 2018(10) G.S.T.L. 401(S.C.), wherein it was held that the Service tax is not to be levied on the reimbursement of expenses.

The Commissioner (Appeals), therefore, was not justified in holding that the reimbursable expenses would be subjected to service tax. Accordingly, this order was set aside and the appeal was allowed.