Recovery of service tax u/s 73(2) of Finance Act, 1994 and ...

Service Tax on Repair Services: Excluding Material Value from Taxable Services Under Finance Act and CGST Act.

September 14, 2024

Case Laws     Service Tax     AT

Recovery of service tax u/s 73(2) of Finance Act, 1994 and section 174 of CGST Act, 2017 with interest and penalty was challenged. The issue pertained to classification of repair and maintenance activity involving supply of materials as works contract service and exclusion of value on which VAT was paid to determine taxable value of services. The Tribunal held that when invoices separately show value of goods and service charges, service tax is chargeable only on service/labor charges, and value of goods used for repair is not includable in assessable value. The Commissioner erred in including value of spare parts in assessable value as it was a composite contract involving supply of goods and services. Service tax was not leviable on composite contracts till 01.07.2012, and the period involved was from April 2009 to June 2012. Consequently, the impugned order was set aside, and the appeal was allowed.

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