Oceaneering International GmbH Vs DCIT (ITAT Mumbai)
Assessee, a non-resident engaged in shipping operations, was assessed u/s 44BB on presumptive basis. AO included GST component collected separately in invoices as part of “gross receipts” while computing deemed income @7.5% u/s 44BB, relying on amended section 145A & ICDS. DRP upheld inclusion of GST.
ITAT held that section 44BB is a special code with a non-obstante clause overriding sections 28 to 43A, and deemed income has to be computed only on amounts specified in section 44BB(2), namely amounts paid or payable on account of carriage of passengers or goods. GST is a statutory levy, collected in fiduciary capacity & deposited with Government, having no element of income and cannot be treated as consideration for carriage. Amendment to section 145A is meant for valuation of purchases/sales/inventory under normal computation and does not alter presumptive taxation mechanism under section 44BB.
Tribunal relied on consistent line of authority including SC, HC & ITAT rulings under service tax regime and held that the same principle applies mutatis mutandis to GST. Inclusion of GST would amount to tax on tax, which is impermissible. Accordingly, AO was directed to exclude GST from gross receipts while computing income u/s 44BB. Advance tax credit issue was restored to AO for verification. Appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
