Union Of India vs M/S Intercontinental Consultants And ...

The Supreme Court examined the validity of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, which mandates the inclusion of reimbursable expenses in the gross value for service tax calculation. The Court held that Rule 5 is ultra vires Sections 66 and 67 of the Finance Act, 1994, as it imposes an additional burden on service providers contrary to the statutory provisions. Consequently, the judgment of the Delhi High Court declaring Rule 5 unconstitutional was upheld, impacting all similar appeals.