TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 612
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....iable to be included in the value of services to confirm demand of service tax. 2. The Appellant is providing Business Auxiliary Service and holding service tax registration. On scrutiny of the contract entered by the Appellant with their clients, it is observed that the Appellant is providing infrastructure services, business application services, shop floor automation service, software development service, etc. Further, as per the Master Service Level Agreement entered by the Appellant with M/s. JSW Steel Ltd, they were given statement of works to be executed which consisted of full details of the items of the works services to be rendered. Thereafter, alleging that the Appellant failed to raise proper invoice by including the value for ....
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....y adjusting the advance. However they were not raising invoices for the advances received in violation of Rule 4A(1) of Service Tax Rules 1994 as they should have raised an Invoice for the taxable services provided or to be provided. After rendering the Service they were raising the invoices and in their books of accounts adjusting the service tax payable against the advance received firstly and thereafter remitting the tax if any. In cases where advances were not received or if the billed amount is more than the advance received they will pay the tax on billing basis. During the course of audit on scrutiny of Sundry Debtors accounts relating to JSW Steels it was observed that on the credit side there were certain entries viz Rs.74.55,111....
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....0 Food coupon expenses from April 2008 to November 2009 debited by TNGL 4 91,560 Attire expenses (shirts) given to employees 5 3,77,639 Salem op balance 6 61,33,995 Madhucar car recovery 7 66,000 KVN Rao Car transferred from Mumbai 8 6,59,131 Software Service 9 11,88,170 BSNL 10 2,43,331 Diwali Gifts 11 16,625 Staff Welfare Expenses 12 41,000 89,39,037 The above expenses were accounted as sundry Creditors (purchase expenses) in the books. The amount payable to JSW Steel were treated as payment received from M/s. JSW Steel and adjusted against the other billed amounts receivables from JSW Steel. Para 6 of the show-cause notice had admitted this fact. The said amount was not paid by M/s.....
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....llant to M/s. JSW Steel Ltd. and on such value, service tax was payable, but not paid. There is also no basis to conclude that the disputed amount was part of the 'gross amount charged' by the appellant for the service provided or to be provided and on which service tax was payable. Thus, there is no admissible evidence to confirm demand as per the impugned order against the consideration or the said amount was part of the gross amount charged under Section 67 of the Finance Act, 1994. It is settled law that even the goods and services provided free of cost by the service receiver for use in providing taxable service is not liable to be included in the value of service, since such free supplies do not result in accrual of any benefit to the....
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.... the required ERP. Further as per the invoices issued by M/s. Oracle India Pvt Ltd., they were supplying the software and software updates and as per said invoice, M/s. Oracle has charged VAT/GST and service tax for the software license and updated software, sold and recovered the same from M/s JSW Steel Ltd. Thus, the Head Office of M/s. JSW Steel Ltd issued debit notes to the Appellant for reimbursement of the allocated expenses. The Appellant incurred the cost of the software and also the cost towards goods and services provided by M/s. JSW Steel Ltd as stated in the showcause notice. Such expenditure and cost incurred by the service provider in the course of providing the service are not liable to be included in the value of taxable ser....
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.... needs to be noted that prior to 19 April, 2006, in the absence of a Rule, the valuation was required to be done as per the provisions of Section 67 of the Act. The Supreme Court noticed that the charging Section 66 provides that there shall be levied Service Tax @ 12% of the value of taxable services referred to in the subclauses of Section 65 and collected in such manner as may be prescribed. Thus, the Service Tax is on the "value of taxable services" and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the Service Tax. It is for this reason that the Supreme Court observed that the expression "such" occurring in Section 67 of the Act assumes importance. It i....