Service Tax - Reimbursement of Expenses - Bhagavathy Traders Goes to Supreme Court
IN SHRI BHAGAVATHY TRADERS Vs COMMISSIONER OF CENTRAL EXCISE, COCHIN - , the Larger Bench of the Tribunal had held,
"The claim for reimbursement towards rent for premises, telephone charges, stationary charges, etc. amounts to a claim by the service provider that they can render such services in vacuum. What are costs for input services and inputs used in rendering services cannot be treated as reimbursable costs. There is no justification on legal authority to artificially split the cost towards providing services partly as cost of services and the rest as reimbursable expenses."
The Party has appealed to the Supreme Court and the Apex Court on 02/01/2012 has admitted the appeal. Incidentally, the Tribunal's Larger Bench had not decided any issue; it found no conflict between the decisions of the Benches and so returned the matter to the referral Bench.