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2015 (4) TMI 967 - HC - Service TaxReimbursements of service tax from the recipient of services - terms of the contract agreement - service recipient refused to reimburse by letter dated 21.10.2010 - Held that:- True, it is that the service provider has the right to collect the said tax from the person to whom service is provided but so far as the Excise and Service Tax Department is concerned, it holds the provider of service as liable to pay the service tax. There is no provision in the said Act for recovery or reimbursement of any service tax by the service tax provider from the person to whom the service is provided. Thus, it is the liability of service provider to pay the service tax arising in the course of the provision of service and to provide for its collection in the contract which it enters into with the person who is recipient of the service. Provisions of Section 64A of the Sale of Goods Act, 1930 cannot be applied to the provision of any service and the liability for tax thereupon as the said provision is specifically confined to the payment of tax in respect to any taxable events in relation to goods and not with regard to services. The taxes, in fact, have been specified as duty of Customs or Excise and any tax on the sale or purchase of goods. The service tax evidently is not upon any contract for sale of goods. It is purely leviable on a contract for provision of service. - More over even in Section 64A of the Sale of Goods Act, 1930 liability of benefit of imposition of new tax or increase or decrease in taxes is subject to there being a different intention appearing from the terms of the contract and the same is not absolute. It is only when the contract is silent on the point that the benefit of liability for increase or decrease on the price of goods on account of such taxes will have to go to the respective party. Service tax was not leviable at the relevant time on works contract (when the contract was excuted) but the same would also be deemed to have been included in view of the clear provision that the rate should be inclusive of direct or indirect elements. Thus, the said provision can only be interpreted to mean that any future increase or decrease of tax or levy of a new tax with regard to item of the contract would be entirely to the benefit or be the liability of the contractor and the same would not have any effect on the rates and service. There does not appear to be any ambiguity in the said provisions. The provisions, in fact, go further to show that it was the tenderer's duty to get it clarified before submitting the tender and thereafter there would be no scope for any doubt or ambiguity regarding non-inclusion of any ingredient of work in the rate. Since service tax had become leviable from 1.6.2007, for the period after 1.6.2007 the liability for the same would fall upon the petitioners and it is not open to the petitioners to claim any such refund from the respondent-Board in the absence of any agreement to the contrary or any provision in the Finance Act, 1994 with respect to the same. - Decided against assessee.
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