Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Frischmann Prabhu (India) Ltd. Versus Commissioner of Service tax, Mumbai-I

2015 (10) TMI 2407 - CESTAT MUMBAI

Valuation – Demand of service tax on reimbursable/out of pocket expenses incurred by appellant while rendering services to various service radicands – Held That:- Issue is no more res integra as demand on reimbursable services cannot now survive in light of case of Enter Continental Consultants and Technocrats pr. Ltd. vs. Union of Indian [2012 (12) TMI 150 - DELHI HIGH COURT] which struck down the provisions of roll find (1) of service tax valuation rolls – Impugned order set aside – Decided in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mmon order. 3. The relevant facts that arias for consideration are appellant here-in are providing consulting engineers services to their client mainly National Highway Authority of India, MMRDA and MSRDC and are discharging service tax liability on the amounts billed and received as consulting fees, during the process of rendering such consulting engineers services, appellant deputes their employees to various sides and recovers the actual expenses like travelling, accommodation, rent for offic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of pocket expenses incurred by the appellant while rendering the services to various service radicands. It is his submission that this issue is now no more res integra as Hon ble High court of Delhi in case of Enter Continental Consultants and Technocrats pr. Ltd. vs. Union of Indian- 2013 (29) STR (DEL) has struck down the provisions of roll find (1) of service tax valuation rolls. It is his submission that any demand on reimbursable services cannot now survive. 5. Learned departmental represe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

accommodation of staff etc. 7. We find strong force in the contentions raised by the learned charted accountant that the issue is now squarely covered by the Judgment of the Hon ble High court of Delhi in the case of Inter Continental Consultants and Technocrats Pvt. Ltd. (Supra). We with great respect reproduce the relevant paragraphs No. 10, 11, 18. 10. The contention of the petitioner that Rule 5(1) of the Rules, in as much as it provides that all expenditure or costs incurred by the service .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ination of the value of the taxable service for the purpose of charging service tax under Section 66 as the gross amount charged by the service provider for such service provided or to be provided by him, in a case where the consideration for the service is money. The underlined words i.e. for such service are important in the setting of Sections 66 and 67. The charge of service tax under Section 66 is on the value of taxable services. The taxable services are listed in Section 65(105). The serv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

legislation and authorises the Central Government to make rules by notification in the official gazette, such rules can only be made for carrying out the provisions of this Chapter i.e. Chapter V of the Act which provides for the levy, quantification and collection of the service tax. The power to make rules can never exceed or go beyond the section which provides for the charge or collection of the service tax. 11. In the aforesaid backdrop of the basic features of any legislation on tax, we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ered as the gross amount charged by the service provider for such service provided by him. The illustration 3 given below the Rule amplifies what is meant by sub-rule (1). In the illustration given, the architect who renders the service incurs expenses such as telephone charges, air travel tickets, hotel accommodation, etc. to enable him to effectively perform the services. The illustration, therefore, says that these expenses are to be included in the value of the taxable service. The illustr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at any rate, double taxation cannot be enforced by implication. A Constitution Bench of the Supreme Court in Jain Brothers v. Union of India - (1970) 77 ITR 107 observed as follows, expounding the principles relating to double taxation :- It is not disputed that there can be double taxation if the legislature has distinctly enacted it. It is only when there are general words of taxation and they have to be interpreted, they cannot be so interpreted as to tax the subject twice over to the same t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y of the tax, once the legislature has, in clear terms, indicated that the income of the firm can be taxed in accordance with the Finance Act of 1956 as also the income in the hands of the partners, the distinction between a charging and a machinery section is of no consequence. Both the sections have to be read together and construed harmoniously. It is significant that similar provisions have also been enacted in the Act of 1961. Sections 182 and 183 correspond substantially to section 23(5) e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ciples that the subject cannot be taxed twice over. 18. Section 66 levies service tax at a particular rate on the value of taxable services. Section 67(1) makes the provisions of the section subject to the provisions of Chapter V, which includes Section 66. This is a clear mandate that the value of taxable services for charging service tax has to be in consonance with Section 66 which levies a tax only on the taxable service and nothing else. There is thus inbuilt mechanism to ensure that only t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f Section 67 which enables the determination of the value of the taxable service in such manner as may be prescribed is expressly made subject to the provisions of sub-section (1). The thread which runs through Sections 66, 67 and Section 94, which empowers the Central Government to make rules for carrying out the provisions of Chapter V of the Act is manifest, in the sense that only the service actually provided by the service provider can be valued and assessed to service tax. We are, therefor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version