Tribunal upholds service tax demand on TDS amounts as part of service consideration. Appellant's plea dismissed.

The tribunal upheld the service tax demand on the TDS amounts, considering them as part of the consideration for services rendered. The appellant's argument of discharging service tax on the total consideration agreed was dismissed. The tribunal found no merit in the appeal, rejected it, and dismissed the appellant's plea on limitation due to the suppression of facts regarding TDS amounts in their balance sheet.

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Issues Involved:
- Whether revenue authorities were correct in demanding service tax on the amounts paid as TDS by NHAI on behalf of the appellant.

Detailed Analysis:

Issue 1: Service Tax Demand on TDS Amounts
The appellant entered into an agreement with NHAI and rendered services. The revenue authorities demanded service tax on the TDS amounts paid by NHAI on behalf of the appellant. The appellant argued that they had discharged the service tax liability on the consideration received for services, excluding the TDS amounts. The appellate authority and adjudicating authority found that the agreement with NHAI specified NHAI's liability to deduct income tax, which they did, and the appellant discharged service tax on the consideration received. The appellant contended that the TDS amounts were not part of the consideration for services rendered.

Analysis:
The Income Tax Act, 1961, considers TDS amounts as income of the payee. The appellant showed the TDS amounts as income in their accounts, directly related to the services rendered. The Finance Act, 1994, under Section 67, mandates service tax on the gross amount charged for services. The judgment in Bhayana Builders Pvt Ltd case clarified that the "gross amount" refers to the entire contract value, and if not charged by the service provider, it cannot be included. The TDS amount paid by NHAI was deemed as consideration for services rendered, subject to service tax.

Judgment:
The tribunal upheld the service tax demand on the TDS amounts, as the TDS was considered income related to the services provided. The appellant's argument of discharging service tax on the total consideration agreed was dismissed. The tribunal found no merit in the appeal and rejected it. Additionally, the appellant's plea on limitation was dismissed due to the suppression of facts regarding TDS amounts in their balance sheet.

Conclusion:
The tribunal affirmed the correctness of the service tax demand on TDS amounts paid by NHAI, considering them as part of the consideration for services rendered. The appeal was rejected, and the appellant's argument on limitation was also dismissed.

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