In case of Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India, 2013 (29) STR 9 Honorable Delhi High Court has held that service tax is not applicable on reimbursement of expenses incurred by Service Provider. Thereafter, department has filed appeal before Apex Court (C.A. No.2013/2014). Till date the issue related to taxability of reimbursements is pending before Apex Court.
However department is proceeding further in terms of Show Cause Notices as well as enforcing demand against service providers.
Recently, aggrieved by various show cause notices issued by the Service Tax Department in terms of Section 67 of the Finance Act, 1994 read with Rule 5 (1) of the Service Tax (Determination of Value) Rules, 2004; petitioners has filed writ petitions before Honorable Delhi High Court (M/s. Balaji Mariline Pvt. Ltd. Versus Joint Commissioner, Service Tax, Commissioner of Service Tax 2014 (3) TMI 566 - DELHI HIGH COURT).
In this case, referring the judgment of Delhi High Court in case of Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India, 2013 (29) STR 9, honorable Delhi High Court has directed Service Tax Department not to proceed further in terms of the impugned show cause notices or draw or enforce any demand against the petitioner. The court has also clarified that the Service Tax Department would, however, be at liberty to initiate proceedings in the event of and having regard to the final orders of the Supreme Court in the pending appeal (C.A. No.2013/2014).
Atul Kumar Gupta
B Com (Hons) FCA, FCMA, MIMA, CIQA, PGDEMM
Central Council Member of ICAI (2013-16)
Former Chairman NIRC of Institute of Chartered Accountants of India
Former Chairman NIRC of Institute of Cost Accountants of India
Author of “An Introduction to Service Tax” & “Comprehensive Guide to Service Tax”
M: 9810103611 E: firstname.lastname@example.org