TaxTMI 
TaxTMI 
2010 (11) TMI 232
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....s their associated enterprise. Prior to the, introduction of Finance Bill 2008, they had been remitting service tax on associated enterprise transactions on collection basis and subsequent thereto, they had been remitting the service tax on associated enterprise transactions on raising service invoice. They had raised three invoices towards providing services of infrastructure, manpower and bandwidth charges to M/s. Sify Communications Ltd. for the quarter ending 31-3-2008 on the same date and three more invoices for the quarter ending 30-6-08 on the same date. On 5-9-2008, they had remitted Rs. 5,78,10,547/- towards service tax on account of associated enterprise transactions vide two challans dt. 5-9-08 under 'Leased Circuit Services' cat....
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.... days in the payment of service tax and therefore the assessee was required to pay interest @ 13% per annum for 158 days on Rs. 2,69,24,788/- being the total service tax payable on 31-3-08 and interest for 62 days on Rs. 3,08,85,760/- being the total service tax payable on 5-7-08. Accordingly, the total interest payable worked out to Rs. 21,97,191/- instead of Rs. 24,19,302/- wrongly paid and it appeared therefore that the assessees were eligible only for refund of Rs. 2,22,111/- and not Rs. 8,44,029/- as claimed by them. 2. Show-cause notice proposing rejection of refund of Rs. 6,21,918/- (difference between the amount claimed and the amount actually eligible); the Asst. Commissioner adjudicated the notice by rejecting the cl....
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....amount received towards the taxable service before, during or after provision of such service. (4) Subject to the provisions of sub-sections (1), (2) and (3), the value shall be determined in such manner as may be prescribed. Explanation. - For the purposes of this section, - (a) "consideration" includes any amount that is payable for the taxable services provided or to be provided; (b) "money" includes any currency, cheque, promissory note, letter of credit, draft, pay order, travellers cheque, money order, postal remittance and other similar instruments but does not include currency that is held for its numismatic value; (c) "gross amount charged" includes payment by cheque, credit card, deduction from accoun....
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....here have been instances wherein service tax has not been paid on the ground of non-receipt of payment eventhough the transaction has been recognized as revenue/expenditure in the statement of profit and loss account for the purpose of determining corporate tax liability. 6.3 As an anti-avoidance measure, it is proposed to clarify that service tax is leviable on taxable services provided by the person liable to pay service tax even if the amount is not actually received, but the amount is credited or debited in the books of account of the service provider. In other words, service tax is required to be paid after receipt of payment or crediting/debiting of the amount I the books of accounts, whichever is earlier. However, this provis....
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.... the removal of doubts, it is hereby declared that where the transaction of taxable service is with any associated enterprise, any payment received towards the value of taxable service, in such case shall include any amount credited or debited, as the case may be, to any account, whether called "Suspense account" or by any other name, in the books of account of a person liable to pay service tax". 6. The statutory provision for demanding service tax in respect of transactions between associated enterprises, immediately upon amendment, has been introduced only w.e.f. 10-5-08. Prior to 10-5-08, neither the Finance Act, 1994 nor the Service Tax Rules, 1994 contain any provision enabling demand of service tax prior to the realization of....