TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1244
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....a (NHAI) in 2001 and rendered services to them. On verification of the records of the appellant for the period February, 2002 to February, 2007 it was observed that NHAI had paid Income Tax (TDS) to the Government of India on behalf of the appellant and the same was not included for discharge of service tax by the appellant. A show cause notice was issued to the appellant for the recovery of differential Service Tax on the amounts paid by NHAI as TDS and interest was also demanded in addition to the proposals for imposition of penalties. The show cause notice was resisted by the appellant on limitation as well as on merits. Adjudicating authority after following due process of law confirmed the demands so raised and also imposed penalties b....
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.... NHAI on behalf of the appellant is correct or otherwise. 7. It is the finding of the first appellate authority and the adjudicating authority that the said amount is as per the agreement entered into by the appellant with NHAI and more specifically clause 1.10.2 of the said agreement indicates so, while it is the case of the appellant that they had discharged the service tax liability entirely on the amounts received as consideration for the services rendered by them and the amounts deducted and paid by NHAI as TDS cannot be considered as an amount received by them for the service rendered. 8. We find that there is no dispute as to the fact that the agreement entered by the appellant with NHAI at clause 1.10.2 [under taxes and duties cla....
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....ee. We reproduce the provisions of Sec.195A: "195A. In a case other than that referred to in sub-section (1A) of section 192, where under an agreement or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purpose of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement." 10. Further as per the provisions of Sec.198 of Income Tax Act, 1961, all sums deducted by payer from the amounts payable ....
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....eproduce the said section as under: "SECTION 67. Valuation of taxable services for charging service tax- (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall, - (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is no....
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....duction from account and any form of payment by issue of credit notes or debit notes and [book adjustment, and 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, where the transaction of taxable service is with any associated enterprise." 13. It can be seen from the above reproduced section 67 of the Finance Act that service tax shall be chargeable on the gross amount charged by the service provider for such services rendered. In the case in hand, the contention of the appellant that they had charged fully for the services rendered and the invoices raised also indicate the discharge of service tax liabili....