https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=758714 https://www.taxtmi.com/caselaws?id=758714 GST amount inclusion while computing the gross receipts u/s. 44BB - assessee is a non-resident company incorporated under the law of Brazil and is engaged in providing onshore and offshore oil well drilling services and had entered into a contract with Oil and Natural Gas Corporation Limited (ONGC) for charter hire of Anchor Moored Drilling Rig Olinda Star for drilling operations to be carried out in offshore waters of India - HELD THAT:- Though the CBDT Circulars is a clarification on the issue of excluding service tax component while computing the income of the assessee who is a resident, the intention of the said Circular nevertheless is to exclude the service tax component while deducting TDS on the rent paid or payable for the purpose of computing the income of the assessee. This, in our view, would also be applicable in the present case where the assessee being a non resident is given the benefit of special rate of tax as per section 44BB of the Act where the intention of the legislature is only to tax the assessee @ 10% on the amount paid or payable to the assessee, received on account of the business activity of the assessee. The word amount here cannot be interpreted to mean the GST/service tax which is collected by the assessee from its customers and paid to the Government. CBDT Circular mentioned above has categorically excluded the service tax component, while computing the income of the assessee and the same could not be interpreted differently to include GST/service tax while computing the profit and gains of a non resident, engaged in the business of exploration, etc. of mineral oils. Furthermore, it is to be noted that section 44BB is a special provision for computing the profits and gains in connection with the business of exploration, etc. of mineral oils which evidences that for the purpose of computing the profit and gains of the assessee, the natural corollary would be from the receipts which are in the nature of income that has to be considered for the said purpose and not the service tax that the assessee was duty bound to collect from its customers in addition to the charges for the services rendered by it. As decided in M/s. Schulumberger Asia Services Limited [ 2009 (7) TMI 51 - UTTARAKHAND HIGH COURT] which was in line with the issue in the present case as to whether the service tax collected by the assessee was to be included in the amount paid or payable for computation of presumptive tax as per section 44BB(1) and (2) of the Act, it was held that the reimbursement of service tax should not be included in the aggregate amount while calculating the profits and gains as per section 44BB of the Act. It is also pertinent to point out that the co-ordinate bench in the case of McDermott International Management [ 2024 (2) TMI 636 - ITAT DELHI] has also held that the service tax component do not form part of the receipt for computation of income as per section 44BB - Decided in favour of assessee. Case-Laws Income Tax Mon, 09 Sep 2024 00:00:00 +0530