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Other Income.
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....ther Income.<br> Query (Issue) Started By: - Pradeep Dongre Dated:- 20-3-2013 Last Reply Date:- 21-3-2013 Central Excise<br>Got 4 Replies<br>Central Excise<br>Sir, During checking of balance sheet it came to notice that the unit has received Rs. 2 Crores as income for non lifting of material by their customer.On questioning the concerned person explained that they had received order for supply o....
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....f goods but due to non lifting by them they were charged Rs. 2 Crores which they have paid as per terms of contract. Kindly let me know whether this income is to be treated as income from manufacture and Ex.Duty is payable or it should be treated as commission income and chargeable to service tax /or under which head of service tax it should fall in case it is income chargeable to service tax.VER....
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....Y URGENT. P.M.Dongre Reply By CA. Surender Gupta: The Reply: Though after inception of negative list in the Service Tax Law and wide scope and definition of the term 'Service' it is felt that all such kind of receipt would be liable to service tax, but to my understanding, such compensation for non lifting of material is nothing to do with service for the purpose of Chapter V of the Finance Act....
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...., 1944. On the other side, in excise, if there is no removal, there is no scope of duty of excise. In other words, the receipt is neither chargeable to excise nor service tax. Reply By Pradeep Khatri: The Reply: On such income which is of non operating nature, service tax is applicable w.e.f. 01-07-2012. Earlier any income generated against Liquidity Damage was not subject to indirect taxation....
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..... Reply By CA. Surender Gupta: The Reply: With due regard, I differ with the view of Mr. Pradeep Khatri. Reply By Pradeep Khatri: The Reply: Kindly refer para 6.7 of the Service Tax Educational Guide, which states as below:- Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act In terms of this entry the following activities if carried out ....
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....by a person for another for consideration would be treated as provision of service. •Agreeing to the obligation to refrain from an act. •Agreeing to the obligation to tolerate an act or a situation. •Agreeing to the obligation to do an act.<br> Discussion Forum - Knowledge Sharing ....