TMI Blog2021 (2) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... or provision of taxable service. Section 67 ibid was amended by the Finance Act, 2015 (20 of 2015), w.e.f. 14.05.2015. The effect of amendment was that subclauses (ii) and (iii) were inserted in clause (a) in the definition of consideration contained in the explanation part appended to Section 67 ibid. The amended provisions include inter alia, any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, subject to the fulfilment of the prescribed conditions. In the present case, it is an admitted fact on record that the appellant had never charged any cost of fuel to M/s. ONGC over and above the amount claimed by it for providing the taxable servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it on time charter basis to ONGC. Such service provided by the appellant is confirming to the definition of taxable service under the category of Mining of Mineral, Oil or Gas Service , defined under Section 65 (105) (zzzy) of the Finance Act, 1994. For providing such taxable service and other category of services, the appellant got itself registered with the Service Tax Department. In this case, the appellant had entered into an agreement dated 29.04.2009 with M/s. ONGC for carrying out the drilling operations. The agreement inter alia, provided that there will be an average consumption of diesel @ 50 KL/per day, which will be provided by M/s. ONGC at their cost. During the course of audit conducted under EA-2000, the department o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged the cost of fuel to the service receiver M/s ONGC for providing the taxable service. The learned Advocate has relied upon the judgment of Hon ble Supreme Court in the case of Commissioner of Service Tax vs. Bhayana Builders (P) Ltd. 2018 (10) G.S.T.L. 118 (S.C.) and Union of India vs. Intercontinental Consultants Technocrats Pvt. Ltd. 2018 (10) G.S.T.L. 401 (S.C.), to state that value of free supplies made under the contractual arrangement by the service receiver to the service provider cannot be added to the value of taxable service provided by the service provider. 3. On the other hand, Shri Suresh Merugu, the learned AR for Revenue reiterated the findings recorded in the impugned order and supported confirmation of the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, subject to the fulfilment of the prescribed conditions. In the present case, it is an admitted fact on record that the appellant had never charged any cost of fuel to M/s. ONGC over and above the amount claimed by it for providing the taxable service. Since, M/s. ONGC was not required to make payment of fuel to the appellant, its value cannot be added to the taxable value both under the un-amended and amended provisions of Section 67 ibid. Further, the appellant herein had received the entire consideration for provision of service in monetary terms. Hence, it cannot be said that it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross amount charged by the service provider for such service provided or to be provided by him . Whether the value of materials/goods supplied free of cost by the service recipient to the service provider/assessee is to be included to arrive at the gross amount , or not is the poser. On this aspect, there is no difference in amended Section 67 from unamended Section 67 of the Act and the parties were at ad idem to this extent. 12 . On a reading of the above definition, it is clear that both prior and after amendment, the value on which service tax is payable has to satisfy the following ingredients : a. Service tax is payable on the gross amount charged :- the words gross amount only refers to the entire contract value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provider is neither an amount charged by the service provider nor can it be regarded as a consideration for the service provided by the service provider. In fact, it has no nexus whatsoever with the taxable services for which value is sought to be determined 13 . A plain meaning of the expression the gross amount charged by the service provider for such service provided or to be provided by him would lead to the obvious conclusion that the value of goods/material that is provided by the service recipient free of charge is not to be included while arriving at the gross amount simply, because of the reason that no price is charged by the assessee/service provider from the service recipient in respect of such goods/mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
