TMI BlogValue of materials not includible in the value of services where the Agreement quantifies the value of materials separately from the value of services renderedX X X X Extracts X X X X X X X X Extracts X X X X ..... Value of materials not includible in the value of services where the Agreement quantifies the value of materials separately from the value of services rendered - By: - Bimal jain - Service Tax - Dated:- 5-12-2014 - - Dear Professional Colleague, Value of materials not includible in the value of services where the Agreement quantifies the value of materials separately from the value of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices rendered We are sharing with you an important judgement of the Hon ble High Court of Allahabad in the case of Commissioner of Central Excise Vs. Goverdhan Transformer Udyog Pvt. Ltd. [2014 (11) TMI 468 Allahabad High Court] on following issue: Issue: Whether value of materials is includible in the value of services, when the Agreement quantifies the value of materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately from the value of services rendered? Facts and Background: Goverdhan Transformer Udyog Pvt. Ltd. ( the Assessee ) provided Management, Maintenance and Repair services ( Repair services ) for the repair of old and damaged transformers to Dakshinanchal Vidyut Vitaran Nigam Ltd. ( DVVN ). The Department alleged that the transformer oil, HV/ LV coil and spare parts, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are goods incorporated into transformers belonging to the DVVN, should be included for the purpose of quantifying the gross consideration received by the Assessee for Repair services as constituting the taxable value. Later, the Hon ble Tribunal relying upon its own decision in the case of Commissioner of Customs and Central Excise Vs. J.P. Transformers [2014 (9) TMI 307 - ALLAHABAD HIGH C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT] ( J.P. Transformers case ) and on Notification No. 12/2003-ST dated June 20, 2003 , decided the matter in favour of the Assessee and held that the law is settled and the principle of law being that where an Agreement quantifies the value of materials separately from the value of services rendered, the value of the materials or goods would have to be excluded since that component is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to Service tax. Being aggrieved, the Department preferred an appeal before the Hon ble High Court of Allahabad. Held: The Hon ble High Court of Allahabad also relied upon the J.P. Transformers case and held that when the Agreement between the Assessee and DVVN incorporated separately the value of the goods or materials from the value of the Repair services rendered, Service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x cannot be levied on the component of goods or materials. Service tax can be levied only on the value of the Repair services rendered. Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards. Bimal Jain FCA, FCS, LLB, B.Com (Hons) Flat No. 34B , Ground Floor, Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cket - 1, Mayur Vihar, Phase - I, Delhi 110091, India Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Email: bimaljain@hotmail.com Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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