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2016 (7) TMI 1271 - CALCUTTA HIGH COURTWorks contract - composition scheme - The stand of the department in the said show cause notice, as discernible therefrom, is that after the enhancement of rate of service tax from 2% to 4% and the petitioner having exercised the option on 26th March, 2008, the payment @ 2% of the service tax on the works contract amounts to evasion of the tax - extended period of limitation - petitioner's claim is that the composite scheme which came into effect from 1st June, 2007 gives an option to the service tax provider under the works contract to pay service tax in relation thereto by paying an amount equivalent to 2% of the gross amount charged for the works contract. Held that: - this Court does not find any error both on facts or law that at the time of exercising an option the rate of tax under the said beneficial scheme was 4% and therefore the petitioner cannot continue to deposit the rates under the said beneficial scheme at the rate of 2%. It admits no ambiguity to say that the rate prevalent at the time of exercising an option would continue until the expiration of the work’s contract and any variation and/or changes in the rate of tax by subsequent notification the department would not be within its authority to charge more as such changes would not be applicable to the existing work’s contract. Petition allowed - decided in favor of petitioner.
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