TMI Blog2024 (2) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice providers and they have not deducted the same from the payment made to the overseas service providers. There are no reason to come to a conclusion that the facts of the case are different as submitted by the learned Authorized Representative for the Department. Moreover, we find that the impugned show-cause notice and the Order do not base their arguments on the conditions of the contract; they hold that TDS per se is includable in the gross value for calculation of service tax - the impugned show-cause notice and the Order do not base their arguments on the conditions of the contract; they hold that TDS per se is includable in the gross value for calculation of service tax. In view of the judgments discussed or cited above, principally, the same is not tenable. Extended period of limitation - HELD THAT:- There is nothing in the show-cause notice and the impugned order to prove any of the ingredients like suppression, mis-statement etc. with intent to evade payment of service tax; therefore, no case is made for invocation of extended period. The appeal is allowed both on merits and limitation. - HON BLE Mr. S. S. GARG, MEMBER ( JUDICIAL ) And HON BLE Mr. P. ANJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 195A, the person responsible for paying the foreign entity, instead of the recipient, is liable to deduct the service tax due to a deeming fiction; the agreement provides that taxes and duties are to be borne by the appellant; agreement dated 02.11.2007 with M/s ITD, Thailand was shown to the Adjudicating Authority; the Adjudicating Authority did not appreciate the theory of the whole taxation and TDS under Income Tax; however, service tax is to be levied on the consideration paid for the service and not on other taxes and duties. 4. Learned Counsel further submits that the issue is no longer res integra having been decided by the Tribunal in the case of TVS Motor Company Ltd. 2021 (55) GSTL 459 (Tri. Chennai); further, in their own case Commissioner (Appeals) has dropped the proceedings initiated against them for the further period from 2012-13 to 2014-15. He relies upon the following cases: Magarpatta Township Development Construction Co. Ltd. 2016 (43) STR 132 (Tri. Mumbai) Garware Polyester Ltd. 2017 (5) GSTL 274 (Tri. Mumbai) Indian Additives Ltd. 2018 (6) TMI 523-CESTAT, Chennai Hindustan Oil Exploration Co. Ltd. 2019 (25) GSTL 252 (Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged by the service provider. The Department does not dispute that the TDS amount is borne by the appellant. The case of the Department is that when the TDS amount is grossed up with the actual consideration agreed between the parties, the TDS portion would become part of the consideration and has to be included in the taxable value. 14.1.2 Section 195 of the Income-tax Act, 1961, is basically concerned with the Tax Deducted at Source (TDS) for the non-residents. The Act lays out a provision to avoid revenue loss as a result of tax liability in the hands of a foreign resident, by deducting such tax at source from the payments made to them. This is to ensure that the tax due from non-residents is secured at the earliest point of time so that there is no difficulty in its collection for the reason that the nonresident may sometimes have no assets in India. Failure to do so will render the person liable to penalty. 14.1.3 On perusal of Section 195, it uses the word any sum chargeable under the provisions of the Act . Unlike other provisions in Chapter XVII (TDS provisions), Section 195 uses any sum instead of any income by way of . This would mean any sum that is paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation. The situation would be different if the TDS is deducted from the actual consideration and is not borne by the Indian counterpart. When the foreign counterpart does not agree to forego the TDS portion from the consideration agreed, then it becomes legally incumbent upon the appellant to gross up the value as under Section 195A. 7. We further find that the in above decision, the Tribunal has referred to the judgments of the Tribunal in the case of Indian Additives Ltd. (supra) and Centre for High Technology (supra) and concludes that the amount of TDS paid is not includable in the gross value for the purpose of payment of service tax. We further find that Commissioner (Appeals) in the Order dated 20.09.2019, for the further period, holds that the agreement provides for payment of TDS by the appellant in addition to the consideration paid to the overseas service providers and they have not deducted the same from the payment made to the overseas service providers. 8. We find that during the impugned period also, the agreement is not different from the above. The agreement clearly provides, at Clause No.3.5 that: The payments are to be exclusive of Value Added Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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