TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1020
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....ers and ammonia and other gases falling under Chapter 28 of the Central Excise Tariff Act, 1985. It is also receiving Consulting Engineering services from Consultancy Agencies established abroad. The appellant has been paying tax under reverse charge mechanism, under Section 66(A) of the Finance Act, 1994 read with Rule 2(1) (d) (iv) of the Service Tax Rules, 1994. The appellant had also deducted and deposited corresponding income tax as TDS, in terms of the relevant provisions of the Income Tax Act, 1961 in the three following ways:- (i) TDS over and above the amount agreed to be paid : In this scenario, the appellant would independently deposit the tax from its own pocket and would not deduct the same from the consideration value. (ii....
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....appellant. He submits that the issue is squarely covered by the ratio laid down by the Tribunal in the case of Magarpatta Township Dev. & Construction Company Limited vs. CCE, Pune - 2016 (43) STR 132 (Tri. Mumbai) where it was observed that; "7. Undisputedly, the appellant has entered into an arrangement/agreement with foreign architect for receiving his services. The said agreement also indicates an amount to be paid as consideration by the appellant to such architect; appellant has discharged the Service Tax liability on such an amount paid to the architect. As per provision of Income Tax Act, the appellant is required to pay the Income Tax on such amount, which he has done so from his own pocket. On this factual matrix it requires to ....
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....n. - 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 account and any form of payment by issue of credit notes or debit notes and book adjustment." It can be seen from the above reproduced Section 67 that it contemplates how the valuation of taxable service for charging Service Tax needs to be arrived and sub-section ....
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.... provided. In the case in hand, we specifically asked for the invoice/bill raised by the service provider and on perusal of the same, we find that appellant had discharged the consideration as raised in the said invoice/bill. There is nothing on record that indicates that the appellant had recovered that amount of Income Tax paid by them on such amount paid to the service provider from the outside India and any other material to hold that this amount is paid as consideration for services received from service provider. 9. In our considered view, the plain reading of Section 67 with Rule 7 of Service Tax Valuation Rules, in this case in hand, Service Tax liability needs to be discharged on amounts which have been billed by the service prov....