Sales of goods, subject to VAT/ sales tax, is outside the purview of service tax

Express Engineers & Spares Pvt. Ltd. Vs Commissioner, Central Goods & Service Tax (CESTAT Allahabad)

Facts- Appellant is engaged in supplies of diesel generators to customers on hire basis. The issue involved in the appeal is whether the appellant renders ‘supply of tangible goods for use service, which is leviable to service tax under section 65(105)(zzzzj) of the Finance Act for the period up to June 30,2012 and under section 66E(f) of the Finance Act for the period from July 01,2012 till 2014-2015.

Conclusion- As per circular dated 23.08.2007 issued by the Department that clarifies that the payment of VAT/ Sales tax on a transaction has to be treated as sale of goods and levy of service tax on such transaction would not arise.  Supply of diesel generator sets to the customers would not amount to STGU service for the period from 01.04.2011 to 30.06.2012 or a declared service from 01.07.2012 to 2014-15.

FULL TEXT OF THE CESTAT ALLAHABAD ORDER

Service Tax Appeal No. 70537 of 2018 has been filed by M/s Express Engineers and Spares Private Limited¹ to assail the order dated February 19, 2018 passed by the Commissioner (Appeals) dismissing Appeal for the reason that there was no infirmity in the order dated February 28, 2017 passed by the Additional Commissioner, Central Excise and Service Tax, Ghaziabad² confirming the demand of service tax under section 73 (1) of the Finance Act, 1994³ with interest under section 75 of Finance Act and penalty under section 78 of the Finance Act.

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