TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Inclusion of Service Charges in Taxable Turnover Upheld Under Trade Tax Act</h1> <h3>M/s I.T.C. Hotel Limited Versus Commissioner Of Trade Tax U.P. Lucknow</h3> M/s I.T.C. Hotel Limited Versus Commissioner Of Trade Tax U.P. Lucknow - [2022] 100 G S.T.R. 491 (All), 2022 (64) G. S. T. L. 139 (All.) Issues Involved:1. Levy of trade tax on service charges realized from customers.2. Remanding of the issue regarding levy of trade tax on imported wine.3. Dismissal of the appeal without issuing a show cause notice before rejecting the account books.Issue-wise Detailed Analysis:1. Levy of Trade Tax on Service Charges:The primary issue pressed during the hearing was whether the Trade Tax Tribunal was justified in including service charges in the taxable turnover. The revisionist, a reputed five-star hotel group, argued that the 10% service charge added to bills for services in banquet halls should not be part of the taxable turnover as it is distributed among staff as an incentive. The revisionist relied on various judgments, including the Bombay High Court's decision in *Sun n Sand Hotel Private Limited vs. State of Maharashtra* and the Delhi High Court's decision in *Commissioner VAT vs. India International Centre*, to argue that service charges collected separately should not be included in the sale price.However, the court noted that under Section 2(h)(vi) of the UP Trade Tax Act, any supply or service rendered for valuable consideration forms part of the sale and is liable to be included in the taxable turnover. The court also referenced the Supreme Court's decision in *M/s India Meters Limited vs. State of Tamil Nadu*, which held that any amount charged, regardless of the name, is part of the taxable turnover. The court concluded that the service charges collected by the revisionist should be included in the taxable turnover and dismissed the revision.2. Remanding of the Issue Regarding Levy of Trade Tax on Imported Wine:The revisionist questioned whether the Trade Tax Tribunal was justified in remanding the issue of trade tax on imported wine to the assessing authority, especially when excise duty had already been paid and was apparent on the record. However, this issue was not pressed during the hearing, and thus, the court did not provide a detailed analysis or judgment on this matter.3. Dismissal of the Appeal Without Issuing a Show Cause Notice:The revisionist also raised the issue of whether the Trade Tax Tribunal was justified in dismissing the appeal without issuing a show cause notice before rejecting the account books. Similar to the second issue, this matter was not pressed during the hearing, and the court did not provide a detailed analysis or judgment on this aspect.Conclusion:The court upheld the inclusion of service charges in the taxable turnover, referencing relevant sections of the UP Trade Tax Act and supporting judgments from higher courts. The other issues raised by the revisionist were not pressed during the hearing, and thus, the court did not provide detailed judgments on those matters. The revision was ultimately dismissed, and the questions of law were answered accordingly.
TaxTMI 