UNION OF INDIA vs M/S INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT.LTD

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, thereby affirming the Delhi High Court's decision that declared the rule unconstitutional. Consequently, the appeals challenging the applicability of service tax on reimbursable expenses were dismissed.