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of <h1>Tax Appeals Dismissed: Trade Margin Taxability Dispute Upheld</h1> <h3>State Trading Corporation of India Ltd Versus Commissioner of Service Tax, Mumbai – I</h3> The Tribunal dismissed three appeals by M/s State Trading Corporation of India Ltd challenging tax demands for business auxiliary services. The core issue ... Business auxiliary services - various components of the sale value recovered as ‘trade margin’ i.e., the difference between the sale price and the purchase price - Held that: - the appellant deducts service charges of 2% on exports, bank charges and trade margin etc. If the transactions were one of trading, the appellant would have treated the sale value of goods as receipts from which expenditures is to be deducted instead of treating them as receipts. Taken in conjunction with the admitted fact that the appellant does not, at any stage, become the owner of the goods, there can be no doubt that the said income is not trading profit but is consideration for some specific services rendered by the appellant - appeal dismissed - decided against appellant. Issues:Dispute over demand for different periods - Consideration for providing business auxiliary services - Taxability of trade margin - Nature of transactions - Assessable value determination - Grounds of appeal lacking cogent submissions.Analysis:The judgment pertains to three appeals filed by M/s State Trading Corporation of India Ltd challenging demands raised by the Commissioner (TAR), Mumbai for different periods. The appellant contests the demands totaling to significant amounts for the periods specified. The core issue revolves around the taxability of the trade margin as consideration for providing business auxiliary services under section 65 (105) (zzb) of the Finance Act, 1994. The agreements with various clients are scrutinized, and the appellant's contention that the transactions constitute sales on 'high sea' is countered by the respondent's argument that the appellant acts as an agent, not an independent entity, based on the terms of the contracts negotiated by clients. Reference is made to legal precedents to support the arguments presented.The investigations reveal that the appellant deducts service charges, bank charges, and trade margin on exports, indicating that the income is not trading profit but consideration for specific services rendered. The appellant's challenge regarding the determination of the assessable value under different sections of the Finance Act, 1994 is dismissed by the Tribunal, emphasizing that section 73 is the statutory authority for initiating recovery proceedings. The impugned order extensively examines the agreements and submissions, leading the Tribunal to conclude that the appellant's grounds of appeal lack substantive arguments to counter the findings in the order.Ultimately, the Tribunal finds no merit in the appeals and dismisses them, as the grounds presented fail to provide sufficient justification to contest the findings in the impugned order. The judgment was pronounced on 15/06/2017 by the Tribunal members, Shri M V Ravindran (Member Judicial) and Shri C J Mathew (Member Technical), with Shri Anil Mishra representing the appellant and Shri D Nagvenkar appearing for the respondent during the proceedings.
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