2024 (2) TMI 16

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng the liability of service tax on TDS portion of the foreign currency remittance made by the Appellant for the services received. 2. Briefly stated facts of the case are that the appellant has imported services like testing, auditing, consultancy etc. from outside India against a consideration. Show Cause Notice was issued demanding differential service tax on the TDS paid by them to the Income Tax Department over and above the bill amount. The notice was adjudicated and the demand raised was confirmed by the adjudicating authority. On appeal, Commissioner (Appeals) upheld the same. Against the order impugned, the appellant has filed the present appeal. 3. The learned counsel for the appellant submits that as per Rule 7(1) of the Ser....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....and paid the consideration as indicated in the invoice. No TDS has been deducted by them from the invoice value. The TDS paid by them was to comply with the provisions of the Income Tax Act. The appellant submits that service tax was paid on the gross value as per section 67 without making any deductions towards the "withholding of tax". We agree with the contention of the Appellant that the amount would not be part of the consideration for the taxable services received by them as per Section 67(1)(a) of the Finance Act, 1994. Accordingly, we observe that service tax is not payable on the TDS paid by the appellant on behalf of the foreign service provider. 7. We find that the issue is no longer 'res integra' as the same issue has already....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ld bear the TDS obligation. This cannot be construed as to mean that TDS is also a part of such value/consideration. This is also because, any value/consideration agreed upon is strictly the choice of the parties but the TDS depends on the rate in force at the relevant point of time. 24.2 Thus, when it is contended that the assessee 'grossed up' the TDS, it is understood to mean that the assessee has indeed received only the amount as agreed towards value/consideration and the expenditure towards TDS are met by the assessee. So, when such TDS is not received from the non- resident since it is not towards value/consideration, there is no merit in requiring such assessee to include even the TDS it paid in the value of service....