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2017 (4) TMI 438 - AT - Service TaxBusiness auxiliary service - incentives received - commission on cargo booked by IATA agents - short paid tax - The impugned order appears to hold that the unclaimed amount is commission received as General Sales Agent and liable to tax - Held that: - expression ‘gross amount charged’ in Section 67 of Finance Act, 1994 is limited to the consideration taxed in the impugned order because the expression ‘gross amount charged, is not an isolated phrase but to be read in conjunction with the expression ‘for such service provided’. Consequently there is no scope for taxing the amounts transferred to IATA agents as consideration for service rendered by assessee. Cum-tax valuation - target incentive - Held that: - As the amount is not evidenced as receipts for services but is merely deemed to be so, it is plain that tax has not been collected on this amount. Moreover the amount paid by the airline is a consequence of contractual terms which does not admit to additional payment of tax on the contracted amount. In accordance with principles of equity, the amount on which tax has been collected should be considered as including the tax component. Likewise, the commission received as General Sales Agent on cargo bookings effected by IATA agents is covered by contractual agreement which, too, does not provide for tax liability on the amount paid by the airlines. Consequently, we find that they are entitled to ‘cum-tax’ valuation of services on which tax has been computed. This would reduce the tax liability, interest liability and penalties arising therefrom. Penalty - Held that: - considering the promptitude with which payments were made along with interest, penalty u/s 76 of Finance Act, 1994 imposed in connection with the first notice is not warranted and is aside. Appeal disposed off - decided against Revenue.
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