Servicos De Petroleo Constellation SA India Project Office Vs DCIT (International Taxation) (ITAT Mumbai)
ITAT Mumbai held that GST/service tax which is collected by the assessee from its customers and paid to the Government do not form part of the receipts for computation of income as per section 44BB of the Income Tax Act.
Facts- The present appeal is filed by the assessee challenging the final assessment order of the Assistant Commissioner of Income Tax The only moot question to be adjudicated in this appeal is whether the GST amount paid by the assessee is to be included while computing the gross receipts u/s. 44BB of the Act.
Conclusion- The assessee being a non resident is given the benefit of special rate of tax as per section 44BB of the Act where the intention of the legislature is only to tax the assessee @ 10% on the amount paid or payable to the assessee, received on account of the business activity of the assessee. The word ‘amount’ here cannot be interpreted to mean the GST/service tax which is collected by the assessee from its customers and paid to the Government. The CBDT Circular mentioned above has categorically excluded the service tax component, while computing the income of the assessee and the same could not be interpreted differently to include GST/service tax while computing the profit and gains of a non resident, engaged in the business of exploration, etc. of mineral oils.
