2014 (33) STR 137 (Mad) Commissioner of S.T., Chennai vs. Sangamitra service Agency.
The question put forth before the High Court was whether reimbursable expenses such as freight, labour, electricity, telephone etc. received by the assessee at actuals should not be added to the taxable value related to clearing and forwarding agent's services inview of Rule 6(8) of the Service Tax Rules, 1994, providing for service tax levy on gross amount of remuneration.
In the absence of any material to show the understanding between the principal and the client that the commission was all inclusive, it was difficult to hold that the gross amount/commission would include expenses for providing services and all incidental charges for running of business. Receipts in the nature of reimbursements would not take colour of remuneration or commission. Rule 6(8) of the Service Tax Rules, 1994 referred to gross amount i.e. receipts in nature of remuneration or commission.