https://www.taxtmi.com/caselaws?id=757509 The CESTAT Chennai held that service tax cannot be levied on warranty provisions made in books of accounts under Accounting Standards (AS) 29. The appellant provided warranty services to customers who purchased machines from HIL Germany, receiving commission which was already subject to service tax. The department incorrectly treated accounting provisions for future warranty expenses as separate consideration for maintenance and repair services. Since no specific consideration was received beyond the already-taxed commission, and the provisions were merely book entries following accounting standards to meet future warranty obligations, the service tax demand was unsustainable. The appeal was allowed and the impugned order set aside. en-us Tue, 27 Aug 2024 00:00:00 +0530 Wed, 28 Aug 2024 09:05:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=757509 The CESTAT Chennai held that service tax cannot be levied on warranty provisions made in books of accounts under Accounting Standards (AS) 29. The appellant provided warranty services to customers who purchased machines from HIL Germany, receiving commission which was already subject to service tax. The department incorrectly treated accounting provisions for future warranty expenses as separate consideration for maintenance and repair services. Since no specific consideration was received beyond the already-taxed commission, and the provisions were merely book entries following accounting standards to meet future warranty obligations, the service tax demand was unsustainable. The appeal was allowed and the impugned order set aside. Case-Laws Service Tax Tue, 27 Aug 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=757509