TaxTMI 
TaxTMI 
TaxTMI 
Section 67(2) provides that where the gross amount charged by the service provider for the taxable services provided or to be provided is inclusive of service tax payable, the value of taxable service in such case shall be the amount as with the addition of service tax payable, is equal to the gross amount charged ,i.e., value shall be considered as inclusive of service tax.
In such cases, gross value of taxable service shall be considered as inclusive of service tax. Also, as per Section 67(3), gross amount charged for taxable service shall include any amount received towards the taxable service before, during or after the rendering of such service. A similar provision existed in earlier provisions of Section 67.
The assessee relies on the following judicial pronouncements:
In Robot Detective & Security Agency GCE Chennai v. CCE, Cheenai 2008 -TMI - 33772 – (CESTAT, CHENNAI), where assessee was providing taxable services and charged gross value without indicating the service tax element separately, it was held that taxable value realized has to be treated as inclusive of service tax due and that service tax liability was to be redetermined.
In CCE & C v. Advantage Media Consultant 2008 -TMI - 4195 – (CESTAT KOLKATA), it was held that when no tax is collected separately, the gross amount has to be adopted to quantify the tax liability treating it as a value of taxable service plus service tax payable.
In Turret Industrial Security Pvt. Ltd v. CCE 2007 -TMI - 3507 – (CESTAT, KOLKATA), where the assessee had not collected service tax separately from its clients, it was held that the value of services received from such clients has to be taken as the value plus tax and accordingly, a bifurcation has to be done to determine the tax amount payable on such receipts.
In P. Sugumar v. CCE, Pondicherry 2009 -TMI - 75670 – (CESTAT, CHENNAI), where assessee had not received any separate amount towards service tax, it was held that gross amount received by him should be taken as cum- tax value and tax amount was to be recalculated.
In Mackintosh Burn Ltd v. CST, Kolkata 2010 -TMI - 201894 – (CESTAT, KOLKATA), it was held that where separate bills were raised on customers, mere nonpayment by customer does not mean that service charges collected to be treated as cum-tax value and as such, cum-tax benefit was not permissible.
In BSNL v. CCE, Jaipur –I (2011 -TMI - 208708 - CESTAT, NEW DELHI), where Service Tax could not be collected from customer though Service Tax was payable, it was held that demand was to be made out on the basis of cum tax value, i.e, amount received by service provider less tax payable. As such, demand amount would have to be reduced.
In National Refrigeration & Air Conditioning Engg. v CCE, Ludhiana 2011 -TMI - 207382 – (CESTAT, NEW DELHI), it was held that since assessee had not charged service tax separately, the assessee was entitled to cum-tax benefit.
In view of the above, without prejudice to other submissions, it is submitted that if at all the taxability arises, value of contract has to be considered as cum-tax value.
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