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2013 (2) TMI 409 - Commissioner - Service TaxTreatment of TDS Whether service Tax is leviable on gross amount charged inclusive of TDS Assessee received Technical Consultancy Service from various service providers, who were not having their office in India Assessee had paid the Service tax on the value of service charges paid after deducting TDS Held that:- Assessee agreed to pay to service provider GBP 370,000, this sum being net of all withholding taxes in India. Whether the assessee pay tax or not, still the foreign service provider is entitled for GBP 370,000 in full. Tax if any paid by the assessee would have to be borne by him and the same cannot be passed on to the foreign party. Thus the gross amount charged by the service provider cannot be treated as inclusive of TDS Further as per Rule 7 of Service Tax (Determination of Value) Rules, 2006, actual consideration to be the value of taxable service provided from outside India. In the instant case, the gross amount charged by foreign party is only 370,000 GBP, which is not inclusive of TDS Therefore TDS value need not to be included in the taxable value In favour of assessee. There was no charging section for levy of Service tax on the service rendered by foreign national to a person in India prior to the insertion of Section 66A of the Act which took place on 18-4-2006 Show Cause Notice was issued on 2-6-2008, demanding Service tax for a period from July 2005 to March 2008 . Assessee are liable to pay Service tax w.e.f. 18-4-2006 only.Therefore demand cannot be raised as the same is hit by limitation of time under Section 73(1) of the Finance Act, 1994 In favour of assessee.
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