August 2014
2014 (34) STR 789 (Tri. – Bang.) Patel Engineering Works vs. C.C., C.E., & S.T., Visakhapatnam- I
By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether value of goods supplied while providing services would be included in valuation under service tax? Held, No.
Facts:
The
appellants undertook maintenance and repairs of ships. They discharged
service tax on the value of services provided. However, the adjudicating
authority confirmed service tax demand on value of goods supplied while
undertaking maintenance, management or repair service. Further, service
tax on GTA services availed was not paid by the appellants. The
appellants stated that Notification Nos. 12/2003 and 1/2006 specifically
excluded value of goods sold and they discharged service tax on correct
amount with respect to GTA services.
Held:
The
Tribunal observed that the Hon’ble Delhi High Court in case of G. D.
Builders & Others vs. UOI 2013 (32) STR 673 (Del) held that Section
67 of the Finance Act, 1994 enables the Government to levy service tax
only on the consideration received for rendering taxable service and it
prohibits inclusion of value of goods supplied while rendering services.
Following the Hon’ble Delhi High Court’s decision, the Tribunal
remanded back the matter with the order to quantify and exclude the
value of goods supplied/sold along with provision of services from
service tax levy.
