CA Bimal Jain
Where Service tax is not charged separately on pretext that services are not taxable, consideration so received has to regarded as cum-tax value and in event of demand, Service tax must be worked out accordingly
Bluechip Corporate Investment Centre Ltd.(the Respondent)has received an amount as commission from Reserve Bank of India (RBI) for the sale of bonds and no Service tax was paid on the said amount. The Department alleged that the transaction entered into by the contracting parties i.e. RBI and the Respondent, is on the premise that the service rendered would not be liable to Service tax. Further, the Respondent has failed to adduce any evidence to prove that the value of taxable service was inclusive of Service tax. Thus, the benefit of cum-tax cannot be allowed.
The Hon’ble CESTAT, Mumbai relying upon the judgment of CCE & C Vs. Advantage Media Consultant [2008 (14) STT 483 (Kol. – CESTAT)], which was further upheld by the Hon’ble Apex Court by dismissing Civil Appeal filed by the Revenue, held that the value received for the taxable purpose needs to be considered as cum-tax amount if the Service tax is not charged as per the Section 67(2) of the Finance Act.
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