Service tax must be paid on the gross amount charged by service providers. Appeal dismissed, tax on full commission upheld.

The Tribunal held that service tax must be paid on the gross amount charged by the service provider, rejecting the appellant's practice of deducting subvention amounts before paying service tax. The Tribunal emphasized that service tax should be based on the total commission received, regardless of subsequent payments made to loan customers. The appellant's appeal was dismissed, upholding the lower authorities' decision to levy service tax on the full commission amount received.

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Issues:
1. Whether service tax should be paid on the gross amount charged by the service providerRs.
2. Can the appellant avoid paying service tax on the subvention amount not received by themRs.

Analysis:
1. The appellant provided services as an agent for promoting vehicle loans, receiving commission from a bank. The appellant deducted subvention amounts paid to loan seekers from the commission before paying service tax. The Revenue contended that service tax should be paid on the full commission received. The Tribunal held that service tax must be paid on the gross amount charged by the service provider, as per Section 67 of the Finance Act, 1994. The appellant's arrangement to benefit from TDS deduction for income tax purposes while paying service tax on a reduced amount was deemed contradictory. The Tribunal upheld the lower authorities' decision, rejecting the appellant's appeal.

2. The appellant argued that since the subvention amount was directly paid by the bank to loan customers and not received by them, no service tax should be levied on that amount. The appellant's books showed the total commission received, with bank payments to customers reflected as expenses. However, the Tribunal emphasized that service tax should be based on the gross amount charged by the service provider, regardless of subsequent payments made. The Tribunal concluded that the commission received by the appellant and reflected in their accounts should be subject to service tax, affirming the lower authorities' decision and dismissing the appellant's appeal.

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