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June 2014

2014 (34) STR 225 (Tri.-Del.) Neelav Jaiswal & Brothers vs. CCEx.,Allahabad.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Valuation: Whether the remittance of contribution towards Provident Fund should be included in gross amount charged for supply of manpower services? Held yes.

Facts:
The Appellants engaged in providing manpower supply agency services received provident fund contribution with respect to personnel deployed by the Appellants with M/s. Hindalco Industries Ltd. The Appellants contested that since provident fund contribution was separately paid and the same did not form part of consideration for providing taxable services, the amounts would not be leviable to service tax. Relying on the decision delivered by the Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. vs. UOI 2013 (29) STR 9 (Del.), the Appellants argued that value of taxable services shall only be gross value received for providing taxable services and nothing more.

Held:
Though the Appellants had statutory obligation to contribute towards provident fund, M/s. Hindalco Industries Ltd. not only remitted the remuneration of the personnel but also remitted the contribution to provident fund. Therefore, both these amounts constituted gross amount charged for providing taxable services.

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